Tech selloff drags global stocks lower
The Nasdaq logo is displayed on a screen at the Nasdaq Market site in Times Square in New York City, U.S., April 17, 2026. REUTERS/Brendan McDermid
NEW YORK/LONDON, June 23 : Global stocks fell on Tuesday, dragged lower by a broad selloff in technology and semiconductor shares as investors continued taking profits on a long rally while bracing for more aggressive Federal Reserve action to fight inflation.
On Wall Street, the tech-heavy Nasdaq led losses, weighed down by semiconductor shares and some megacap stocks.
Nvidia fell 4 per cent and Tesla dropped nearly 6 per cent. SpaceX shares reversed an early decline to trade up nearly 1 per cent. Chip stocks finished down nearly 8 per cent.
The Dow Jones Industrial Average lost 0.09 per cent, the S&P 500 fell 1.4 per cent, and the Nasdaq Composite fell 2.2 per cent.
"If you look at the technical indicators, the SOX was at its most overbought level in the last three years so there's definitely an element of expectations getting stretched, market positioning getting stretched, and valuations getting stretched," said Amanda Agati, chief investment officer at PNC Asset Management Group.
European shares also declined, with the STOXX 600 down 0.73 per cent, pressured by losses in semiconductor and chip-equipment makers. The weakness followed declines across Asia, where Seoul’s Kospi index plunged 10 per cent in its sharpest one-day drop since March. MSCI's gauge of stocks across the globe fell 1.66 per cent.
"This looks like a largely technical move, driven in part by profit-taking ahead of Micron's earnings," said Ross Mayfield, investment strategy analyst at Baird. "The trade has been highly concentrated and flow-driven, which makes it vulnerable to relatively small shifts in sentiment. In that sense, it doesn’t appear to be closely tied to the fundamentals of the AI story, but rather to the heavy concentration and strong inflows into tech and global tech over the past few months now starting to unwind."
OIL REMAINS BELOW $80 A BARREL
Oil prices remained subdued, with Brent crude settling below $80 a barrel as tanker traffic through the Strait of Hormuz increased and physical market prices neared pre-conflict levels.
The U.S. agreed to waive sanctions on Iran for 60 days from Monday, after the first round of talks under a nascent peace deal that was struck last week on ending more than three months of war.
While lower oil prices would typically support equities, investors' focus has shifted to the inflation outlook and central bank policy. Markets now expect the Fed to take a firmer stance on inflation under Chair Kevin Warsh.
U.S. Treasury yields have surged in recent sessions, with 2-year yields — highly sensitive to rate expectations — hitting 16-month highs. On Tuesday, both 2- and 10-year yields were modestly lower on the day, at 4.23 per cent and 4.50 per cent, respectively.
Money markets are now close to fully pricing in a rate hike by September, helping to push the dollar index to a one-year high against a basket of currencies. The index was last up 0.37 per cent at 101.38.
"The data to me does not suggest that they need to be raising rates. It suggests they need to sit on pause for a while and see if the Middle East conflict-driven inflation data unwinds as a function of the negotiations and the deal," Agati said.
YEN AT 40-YEAR LOWS
The dollar’s strength has weighed heavily on the Japanese yen, which hovered near 40-year lows at 161.56 per dollar. The euro slipped below $1.138 to its lowest level in a year as investors scaled back expectations for further European Central Bank tightening.
Japanese Finance Minister Satsuki Katayama said she discussed global financial markets with U.S. Treasury Secretary Scott Bessent on Monday, which analysts said could signal a rising risk of intervention to support the yen.
In Britain, the pound fell 0.40 per cent to $1.3194 on the 10th anniversary of the Brexit vote. Sterling remained under pressure after Prime Minister Keir Starmer said he would resign, paving the way for what is expected to be a smooth political transition to Andy Burnham.
Gold also declined, falling 1.93 per cent to $4,109.49 an ounce as higher rate expectations reduced the appeal of non-yielding assets.
In cryptocurrencies, bitcoin fell 3.07 per cent to $62,397.18. Ethereum declined 4.13 per cent to $1,661.48.
