New Delhi, June 23 (IANS) US stock futures tumbled on Tuesday, signalling a weak start for Wall Street, as a global selloff in technology shares reignited concerns over whether massive investments in artificial intelligence (AI) can justify soaring market valuations.

Nasdaq 100 futures fell more than 2 per cent, while S&P 500 futures declined over 1 per cent in pre-market trading.

Meanwhile, Dow Jones futures were relatively resilient, falling around 0.4 per cent.

The selling was triggered after a sharp correction in South Korea’s semiconductor sector, a key pillar of the global AI supply chain.

South Korea’s benchmark KOSPI index plunged 10 per cent, forcing the Korea Exchange (KRX) to activate a market-wide circuit breaker after heavy foreign and institutional selling.

Shares of semiconductor giants Samsung Electronics and SK hynix fell more than 12 per cent each amid reports that SK hynix may slow the expansion of AI memory-chip production and focus more on conventional DRAM products.

The development raised concerns over the pace of future AI-related demand and spending.

The selloff quickly spread across the region, with the MSCI Asia Pacific Information Technology Index falling nearly 5 per cent and snapping an eight-session winning streak.

In addition, European markets also signalled weakness, with Euro Stoxx 50 futures down more than 1 per cent.

The AI trade has been one of the strongest drivers of global equities this year, helping major indices scale record highs despite geopolitical tensions and elevated interest rates.

However, investors have increasingly questioned whether the enormous spending on AI infrastructure, data centres and advanced chips will generate returns sufficient to justify lofty valuations.

Apart from that, investors and traders concerns were also reflected in the sharp decline in AI-linked heavyweight SpaceX.

The company’s shares fell 16 per cent, extending their three-day decline to 23 per cent and wiping out more than $600 billion in market value.

The selling pressure came after reports that SpaceX is seeking to raise at least $20 billion through its first investment-grade bond offering to help fund its artificial intelligence ambitions.

Meanwhile, easing geopolitical tensions in West Asia and softer oil prices offered little support to technology stocks as investors focused instead on valuation concerns and the sustainability of the AI-led market rally.

Additionally, the weakness was witnessed in Indian technology stocks. Nifty IT declined as much as 2.34 per cent or 648.9 points to an intraday low of 26,979.65 from its previous close of 27,628.55. Headline indices Sensex and Nifty decreased by up to 1 per cent during the session.

–IANS

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