European indices have plummeted as investors sell off tech stocks

European stocks fell sharply at the opening bell on Tuesday, June 23, following a global sell-off in technology companies. The pan-European Stoxx Europe 600 index plummeted 1%, with the technology sector and commodity producers leading the decline. The German DAX index fell 1.3%.

Futures on U.S. stock indices are also falling sharply: S&P 500 futures are down 1.4%, while Nasdaq Composite futures have plummeted 2.3%.

Semiconductor manufacturers were the main driver behind the sell-off in global markets. Investors began taking profits on tech stocks, which had been among this year’s top performers, according to Bloomberg. In particular, South Korea’s Kospi index fell by more than 9%, triggering an automatic trading halt. The two largest stocks in the index—memory chip makers SK Hynix and Samsung Electronics—lost 10% of their value.

The sharp decline in South Korea’s leading semiconductor stocks may indicate that investors are rushing to lock in profits following the recent rally, which is also a warning sign for the U.S. technology sector, according to Bloomberg.

“Right now, the market is reacting sharply to any headline that could be interpreted as a sign that demand for AI memory is beginning to plateau,” Amanda Lyons, head of research at Energy Group Capital, told the agency. “This vulnerability is not related to the scale of infrastructure investment, but rather to investors’ positioning and high company valuations.”

“Risk aversion has clearly intensified in the market,” Rodrigo Catril, a strategist at National Australia Bank, told Bloomberg. “It appears that investors are currently more concerned about the weak performance of major U.S. tech companies than they are about the positive impact of falling oil prices.”

This news story is being updated.

This article was AI-translated and verified by a human editor