Stocks around the globe took a hit today as investors rushed out of tech and AI-linked names, wiping out a big chunk of the rapid gains the sector had posted this year. The pain was sharpest for chipmakers and other suppliers closely tied to Bay Area cloud and AI giants, triggering sudden markdowns across Asia and Europe. Traders said the selling wave reflected fresh doubts about whether massive, often debt-funded bets on AI infrastructure will actually deliver the returns investors have been counting on.
Markets in motion
As reported by The New York Times, futures were under pressure ahead of the U.S. open, down nearly 1% for the S&P 500 and roughly 1.5% for the Nasdaq after a broad selloff in semiconductor stocks. The slide stretched from the United States into Asia and Europe, where indexes lifted by AI winners began to give back gains. The New York Times also noted analysts who pointed to heavy positioning and borrowed money as reasons the move felt so abrupt.
TSMC pledge rattles chip traders
Taiwan Semiconductor Manufacturing Co.'s decision to add roughly $100 billion to its U.S. investment program, bringing its planned U.S. spending to about $265 billion, helped stoke investor nerves, according to AP News. Company executives said the money would fund additional 2-nanometer fabs and advanced packaging to meet multiyear demand from leading U.S. customers, but they declined to give a firm timetable. The size of the commitment, arriving alongside record quarterly profits, left traders weighing the risks of a long, capital-intensive buildout.
Chip names and indices hit hardest
Coverage from Focus Taiwan, alongside reporting from Euronext, showed Europe's STOXX 600 slipping roughly 0.6% to 0.7%, while Japan's Nikkei tumbled more than 4% and Taiwan's TAIEX dropped in the mid single-digit range, with semiconductor-heavy lists hit hardest. The selloff knocked equipment suppliers and memory makers across Asia and pushed futures lower ahead of U.S. trading. Brent crude also traded in the mid-$80s, adding to the day's risk-off tone.
Why investors are jittery
Market participants say the pullback looks more like a reset of the AI trade than a sign that the theme has fallen apart. Analysts at BNY, cited by The New York Times, wrote that “this is not the a.i. or semiconductor growth story collapsing,” while warning that heavy positioning and leveraged retail trades can exaggerate moves. In its own flow commentary, BNY iFlow documented outsized foreign selling in Taiwanese stocks in recent sessions, underscoring how broad the unwind has been.
What to watch next
Traders told Reuters that earnings from major tech names, notably Alphabet and Intel, will be the next key test of whether hyperscalers pare capital plans or stick with them. Signals on capex from those companies could either soothe markets or deepen the rotation away from chips into other corners of tech. Volatility is likely to stay elevated until companies offer clearer guidance on AI spending plans and timelines.
