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Business 3 min read
Wall Street is getting trampled by an AI sell-off. South Korean market plunges 10%
By 
David Goldman, John Towfighi
Updated 1 hr 11 min ago
Updated Jun 23, 2026, 10:38 AM ET
PUBLISHED Jun 23, 2026, 8:10 AM ET
Tech newsInvestingStocksEconomy
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Currency dealers monitor exchange rates as a screen shows South Korea's benchmark stock index (KOSPI) in a foreign exchange dealing room at the Hana Bank headquarters in Seoul on Tuesday.
Jade Gao/AFP/Getty Images
Summary
- US markets extended losses Tuesday with the Nasdaq falling more than 2% as volatility swept through global technology stocks.
- South Korea's market plunge saw Samsung and SK Hynix tumble more than 12% as chipmakers drove losses across Asia.
- Traders worry AI valuations have climbed too high.
AI-generated summary was reviewed by a CNN editor.
Volatility has returned to the stock market, and AI is once again the culprit.
The tech-heavy Nasdaq Composite sank 2% Tuesday as investors sold AI-related stocks. The S&P 500 fell 1.34%. The Dow, which has less tech influence, was down just 57 points, or 0.1%.
The sell-off followed Monday’s modest decline in tech stocks, which carried over into Asia Tuesday. But that nervous energy quickly spiraled into full-on panic trading in South Korea, where the Kospi index tumbled 10% Tuesday, tripping a circuit breaker that led to a 20-minute cooling-off session.
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SK Hynix and Samsung, two of the world’s leading memory chipmakers, tumbled more than 12%, dragging the rest of South Korea’s stock market down with them (the two chipmaking giants make up about half of the Kospi’s total market value).
Traders’ fear isn’t about anything specific, and there wasn’t any obvious catalyst to lead to such enthusiastic selling. But those nerves appear to be returning in the United States, where tech stocks were headed for a rough day: The tech-heavy Nasdaq dropped 2% Tuesday morning, one day after falling 1.3%.
20250512-stock-market-nasdaq-recent-live
Tracking the Nasdaq
One-year trend, with the percentage change from the previous closing value.
July 2025Oct. 2025Jan. 2026April 202618,00020,00022,00024,00026,00028,000
Some market analysts pointed to jitters sparked by Google ( GOOG) and SpaceX ( SPCX) falling somewhat sharply Monday. But Google’s 5% decline was mostly because of a high-profile AI leader defecting to Anthropic, and SpaceX – which dropped 16% Monday – has some post-IPO jitters that are typical for companies whose stocks boom right out of the gate.
Google fell 0.5% Tuesday, while SpaceX fluctuated in volatile trading. Nvidia ( NVDA) was about 3% lower, weighing on the broader market. Oracle ( ORCL) fell more than 1%, putting it down about 24% this month.
Other analysts suggested the markets were reacting to the likelihood that the Federal Reserve may raise interest rates later this year. But that’s not exactly new information: New Fed Chairman Kevin Warsh held his first press conference last Wednesday to announce that the Fed would double down on its mission to get inflation under control – a promise that prompted a market sell-off as it interpreted Warsh’s words as a pledge to raise interest rates later this year.
Semiconductor chip stocks, which have led the market rally this year, fell sharply Tuesday: Micron Technology ( MU) dropped 11%. Marvell Technology ( MRVL) sank 9%.
Memory and data storage stocks are on a tear
Memory and data storage stocks are on a tear
The AI infrastructure buildout is intensifying demand for memory chips and storage, and driving up the value of companies that provide those goods and services.
Year-to-date percent change for some top-performing stocks in the S&P 500
This graphic depicts the year-to-date percentage gains for shares in SanDisk, Micron, Intel, Seagate and Western Digital, compared to the gains for the S&P 500.
SanDisk
Micron
Seagate
Western
Digital
200400600%
S&P 500
11%
642%
235%
217%
263%
Chart explorer. Use arrow keys ↑ ↓ ← → to navigate.
Source:FactSetGraphic:John Towfighi, CNN
Whatever the cause, with AI companies’ sky-high valuations and incredible growth trajectories, it doesn’t take much to set off investors. The Kospi is up 90% this year, so when the wind blows in an unexpected direction, it can lead traders – and, often more consequentially, trading algorithms – to head for the exits. They fear the top of the Jenga tower could tip over.
The problem, as always with markets, is no one knows how high the Jenga tower goes. We could still be building the foundation.
Nevertheless, the fear in South Korea spread throughout Asia. Japan’s Nikkei fell 3.6% and tech behemoth Softbank sank 15%. Most other Asian indexes were down more than 1%.
Although tech stocks have been under pressure lately, they really haven’t dropped all that much: The Nasdaq is down about 5% from its record high set on June 2.
Stocks have been at or near record territory for most of the past couple of months. After President Donald Trump announced a ceasefire in Iran in April, the market largely moved on from the war and returned to a sharp focus on AI and the Fed’s interest rate policy.
Case in point: Oil prices continued to fall a little on Tuesday morning, as traders cheered apparent progress in peace negotiations.
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