AI-driven tech sell-off wipes out $1 trillion as global markets slide

A sharp sell-off in AI-linked technology stocks erased more than $1 trillion in market value this week, triggering the most severe AI-driven market rout since the technology entered the mainstream and dragging down global equities and credit markets.

Global stock markets fell on Thursday as investors aggressively sold technology shares and reassessed valuations after years of strong gains. US equities declined for another session as markets shifted into a risk-off mode, unwinding crowded trades in technology stocks and bitcoin. The S&P 500 fell 0.6%, the Nasdaq dropped 0.7%, and the Dow Jones Industrial Average lost 244 points, or 0.5%.

The sell-off followed a weak Wall Street close on Wednesday, when heavy losses in technology shares pushed the S&P 500 down 0.5%, marking its fifth decline in six sessions. The Nasdaq Composite slid 1.5%, while the Dow rose 0.5%, supported by gains in non-technology stocks. Despite more stocks rising than falling within the S&P 500, weakness in large-cap technology names dragged the index lower for a second consecutive day.

Asia bears the brunt
Selling pressure spread rapidly across Asian markets, with South Korea leading regional losses. The Kospi plunged nearly 4%, weighed down by sharp declines in major chipmakers. Samsung Electronics fell 5.9%, while SK Hynix tumbled 6.7%, reflecting heightened concern over elevated valuations in the semiconductor and AI supply chain.

Japan’s Nikkei 225 fell 0.9% to 53,818.04, while Taiwan’s Taiex declined 1.5%. Australia’s S&P/ASX 200 eased 0.4% to 8,889.20. China’s Shanghai Composite slipped 0.6% to 4,075.92. Hong Kong’s Hang Seng recovered from early losses to close marginally higher, up 0.1% at 26,885.24.

Indian markets also ended lower, with the Sensex falling 503.76 points, or 0.60%, to 83,313.93, and the Nifty declining 0.52% to 25,642.80. Analysts attributed the pullback to profit booking following recent gains sparked by optimism around the India–US trade deal announcement.

Europe steadier amid global volatility
European markets showed relatively limited movement compared to Asia and the US. Germany’s DAX edged down 0.2% to 24,568.67. France’s CAC 40 rose 0.2% to 8,278.99, while Britain’s FTSE 100 slipped 0.3% to 10,371.83.

US equity futures were mixed, with S&P 500 futures up 0.2% and Dow Jones Industrial Average futures down 0.1%, suggesting continued uncertainty over near-term market direction.

The widespread sell-off highlights growing investor unease over stretched valuations in AI-linked stocks, which have driven global market gains over the past year. As enthusiasm around artificial intelligence cools, markets are increasingly vulnerable to sharp corrections as investors rebalance risk and reassess growth expectations.