The S&P 500 and Nasdaq Composite were lower on Tuesday as a sell-off in technology stocks that began in the previous session accelerated overnight, and global markets in Asia were shaken by a drop in stocks linked to memory chips.
The broad market index fell 1.44% to 7,365.46, while the tech Nasdaq fell 2.21% to close at 25,587.04. The Dow Jones Industrial Average ended down 45.87 points, or 0.09%, at 51,666.84.
The major averages were off their lows as technology stocks outside of chipmakers such as Microsoft and Amazon, as well as defensive stocks such as Walmart, Procter & Gamble and Johnson & Johnson rose. In addition, shares of International Business Machines rose 5% after JPMorgan upgraded its rating to overweight, while Sherwin-Williams and Merck also posted gains.
Nasdaq fell 1.3% on Monday, mainly due to shares of Alphabet, reports SEEbiz. Sales then accelerated globally, with South Korea’s Kospi leading losses in the region. Leading memory chip maker SK Hynix, which led the country’s artificial intelligence speculative frenzy, closed down more than 12%. South Korea’s benchmark index, which has risen 95% this year, fell nearly 10%, while Japan’s Nikkei 225 fell 3.55%, snapping eight sessions of gains.
American shares of Micron Technology followed on Tuesday, with the memory chip maker down 13%. Sandisk also fell 13%, while component maker Seagate Technology fell more than 5%. Intel retreated 6%, while Advanced Micro Devices and Qualcomm lost nearly 6% and 8%, respectively.
State Street Technology Select Sector SPDR ETF ( XLK ) fell 4%. The VanEck Semiconductor ETF (SMH) fell 7%. Meanwhile, SpaceX rose about 1%.
Alphabet continued to lose, falling 1%. Shares fell 5% on Monday amid concerns over the departure of high-profile artificial intelligence experts at the firm.
“AI users are a selloff, and I don’t think they’re expensive, but they’re crowded,” Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management, said on CNBC’s “Squawk Box” on Tuesday. “It’s kind of captured the zeitgeist of momentum traders and when that happens, you’re going to have sell-offs like the ones we’re having. I’d say that’s healthy.”
