23.06.202613:35:45UTC+00US Tech Stocks Sell Off

US equity indices fell sharply on Tuesday, led by a broad selloff in mega-cap technology stocks. The Nasdaq 100 dropped 3%, the S&P 500 declined 1.5%, and the Dow slipped 0.5%. AI-related shares were under heavy pressure amid mounting doubts that hyperscalers’ massive capital outlays will generate commensurate returns. Nvidia and Tesla each lost 4%.

In a similar vein, SpaceX sank 16% after issuing bonds just a week after its IPO, reinforcing concerns over its potentially outsized capital expenditure needs. Semiconductor names also weakened after SK Hynix announced it would slow production of advanced AI chips in order to increase output of commodity DRAM, feeding into worries that AI datacenter investment remains ahead of underlying fundamentals. Micron fell 11% ahead of its earnings release tomorrow, while Sandisk dropped more than 12%.

US Treasury yields stayed elevated despite lower energy prices in the wake of last week’s hawkish Fed dot plot, offering little relief to more traditional sectors of the market. Financials also came under pressure as Apollo again moved to cap withdrawals from its private equity vehicles.