When you buy through links on our articles, Future and its syndication partners may earn a commission.
A steep sell-off in South Korea spread to Europe and the U.S. on Tuesday, as investors, traders and speculators asked hard questions about the sustainability of capex plans amid what so far has seemed to be an ever-expanding artificial intelligence (AI) boom. Meanwhile, the Trump administration is talking up another cutting-edge corner of the stock market.
The KOSPI Index, which includes South Korea-based semiconductor stocks such as Samsung Electronics (SSNLF) and SK Hynix (HXSCL), fell 910 points, or 9.99%, to 8,203 on Tuesday. The two chipmakers, which account for more than half of the KOSPI’s value, had led the index past the 9,100 level for the first time ever on Monday.
By the closing bell, the tech-heavy Nasdaq Composite was off 2.2% at 25,587, the broad-based S&P 500 had declined by 1.4% to 7,365, and the Dow Jones Industrial Average was down 0.1% at 51,666.
“There is a great near-term buying window for many of the high-flying memory and other technology stocks,” Louis Navellier of Navellier & Associates observes, noting that memory stocks showed relative strength on Monday as the Nasdaq sold off late, “but lost their mojo” because of what happened overseas.
Indeed, Navellier expects Micron Technology (MU, -13.2%) to announce record top- and bottom-line results after the closing bell on Wednesday. “The last correction in AI-related stocks this month only lasted four trading days,” he writes, “so every dip should be viewed as a buying opportunity.”
Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that’s delivered straight to your inbox at the close of each trading day.
The front-month West Texas Intermediate crude oil futures contract was down 0.7% to $73.34 per barrel and has now retreated almost 40% from its wartime highs near $120, as inflation pressure from the Strait of Hormuz continues to ease.
Meanwhile, the 2-year Treasury yield ticked up to another new 52-week high on Tuesday before settling at 4.200% vs 4.219% on Monday, as markets continue to price in a path for short-term interest rates under new Fed Chair Kevin Warsh.
Big Blue gets a quantum bounce from the White House
International Business Machines (IBM, +5.0%) was No. 1 among the 30 Dow Jones stocks on Tuesday, as markets bid up the old-school technology firm on word from the White House of two new executive orders designed to accelerate quantum innovation and to protect against cryptographic attacks.
