Global Markets React to Semiconductor Selloff
US equity futures are sharply lower as a selloff involving semiconductors and the market conditions in South Korea spreads globally. The decline has impacted technology stocks, including SpaceX shares which fell 3% according to reports.
The drop pushed SpaceX stock below its first-day trading price of $150. Bloomberg notes that traders are pointing to a South Korean media report stating SK Hynix is slowing expansion of AI memory chip production and shifting emphasis to commodity DRAM.
Futures Data at 8:00am ET
As of 8:00am on the day of reporting, S&P futures were down -1.3% and Nasdaq futures tumbled 2.7%, both near session lows. In premarket trading, Intel led a broader decline among chipmakers with shares falling approximately 6%. Micron shares fell roughly 7%. AMD shares declined about 6%. CoreWeave shares dropped around 5%.
SpaceX Performance
In premarket trading specifically, SpaceX shares fell an additional 4.3%, placing them below the $150 initial trade price reported in market data.
Sector and Regional Impacts
The "Mag7" group dragged indices lower during this period. Microsoft and telecom stocks acted as relative safety valves within that index composition. Nvidia shares led the Magnificent Seven group lower by approximately 2%. Tesla shares fell about 2% while Meta declined -0.6%, Microsoft rose +1%, Apple dropped -0.3%, Amazon slipped -0.6%, and Alphabet fell -2%.
South Korean Market Decline
In Seoul, South Korea, chip giants SK Hynix Inc. and Samsung Electronics Co. slumped more than 10%. This regional decline contributed to the broader global sentiment shift observed in technology sectors.
Earnings Anxiety Factors
JPMorgan Chase reported that the sell-off "may reflect anxiety into MU's print on Weds as well as the levered ETF mkt structure." The report attributes part of the decline to concerns regarding Micron Technology's earnings release scheduled for Wednesday.
Broader Market Conditions
Bonds are operating as a safety haven while the yield curve bull steepens, and the USD is bid. Commodities saw further declines in Energy due to ongoing US/Iran discussions; precious metals were hit by movements in both the USD and AI/Tech sectors including gold and silver respectively.
Agricultural commodities showed mixed performance during this trading session. Avis Budget shares climbed approximately 4% after entering into a settlement agreement with Pentwat, providing contrast within the broader market decline.
Chinese Equities
Chinese equities in Hong Kong entered a bear market during this period of global volatility affecting technology and semiconductor-related assets worldwide.