Asian stock markets plunged on Wednesday in their worst session in seven months, with technology and AI-related shares leading a sharp retreat as investor concerns over inflated valuations spread from Wall Street.
South Korea’s Kospi index dropped more than 6%, erasing gains from last week’s record high. Japan’s Nikkei 225 fell 4.5%, Hong Kong’s Hang Seng shed over 1%, and Taiwan’s benchmark declined 2.5%.
Tech giants took the hardest hits: Samsung Electronics lost 5.5%, SK Hynix plunged more than 6%, and SoftBank Group, a major AI investor, cratered over 14%, wiping out more than $30 billion in market value.
The rout followed a steep U.S. decline Tuesday, where the S&P 500 fell 1.1%, the Nasdaq Composite dropped 2%, and the Russell 2000 slid 1.8%.
Nvidia shed nearly 4%, and Palantir Technologies tumbled 8% despite beating earnings expectations. Weak reports from chipmakers Advanced Micro Devices and Super Micro Computer deepened the gloom, sending their shares lower in after-hours trading.
Wall Street leaders had foreshadowed trouble. Goldman Sachs CEO David Solomon told CNBC late Monday that AI valuations were “getting a bit frothy,” while Morgan Stanley’s Ted Pick warned of an impending pullback.
U.S. futures signaled more pain Wednesday, with S&P 500 contracts down 0.5% and Nasdaq futures off 1%. European indexes looked set to follow, with Germany’s DAX futures indicating a 1.2% drop and major gauges in France and Britain poised to fall over 0.5%.
Despite the sharp correction, major indexes remain solidly higher for the year: the S&P 500 is up more than 15%, and the Nasdaq has gained over 20%.
The AI-driven rally has repeatedly pushed markets to new highs, but Wednesday’s synchronized selloff highlights growing unease. If doubts persist, the global boom could face its first serious challenge of 2025.
