Hong Kong — Tech stocks led a broad sell-off across Asian markets on Wednesday, as mounting fears of an AI bubble sparked panic among investors following months of record-breaking rallies.
Global equities have surged this year, fueled by massive investments into AI-linked firms like Nvidia, Amazon, Apple, Samsung, and Alibaba. But traders are now questioning whether valuations have climbed too far, too fast.
Adding to the unease, the U.S. Federal Reserve’s warning that further rate cuts are not guaranteed has rattled market confidence, sending Wall Street tumbling on Tuesday — the Nasdaq fell over 2%, and the S&P 500 dropped more than 1%.
The sell-off spilled into Asia:
- Seoul’s KOSPI plunged as much as 6%, with Samsung and SK hynix each down around 7%.
- Tokyo’s Nikkei sank over 4%, dragged by a 14% loss in SoftBank and a 2% decline in Sony.
- Taipei, Hong Kong, Shanghai, and Singapore all followed in a “sea of red,” according to analysts.
Despite the turmoil, some bright spots remained — Nintendo jumped more than 10% after raising forecasts for its upcoming Switch 2 console and annual profits.
Market strategist Chris Weston of Pepperstone described the day as “a gloomy portrayal of risk,” noting traders were “locking in profits” from AI-linked stocks such as the Magnificent Seven.
Meanwhile, Capital Group CEO Mike Gitlin and Goldman Sachs’ David Solomon both cautioned that AI-driven valuations have become stretched, warning of a potential correction.
Even Bitcoin felt the heat — briefly dropping below $100,000 for the first time since June.
At around 02:30 GMT:
- Nikkei 225: ▼4.7% at 49,104.05
- Hang Seng Index: ▼1.1% at 25,676.11
- Shanghai Composite: ▼0.4% at 3,943.45
- WTI Crude: ▼0.7% at $60.13
- Brent Crude: ▼0.6% at $64.05
