US futures tumble as global tech selloff deepens, Nasdaq futures sink nearly 3%

US stock futures tumbled on Tuesday, led by a sharp selloff in technology shares, as a rout in global memory-chip stocks intensified concerns about stretched valuations in artificial intelligence-linked companies despite signs of progress in US-Iran negotiations.

Futures tied to the Nasdaq 100 fell 2.6%, pointing to a steep decline for the tech-heavy index at the open. S&P 500 futures dropped about 1.2%, while Dow Jones Industrial Average futures lost 0.4%, reflecting broader market caution as investors reassessed exposure to some of the market’s biggest AI beneficiaries.

The downturn extended to US chipmakers in premarket trading.
Micron Technology dropped about 7%, while Sandisk and Seagate Technology fell more than 8% and 7%, respectively. Intel declined nearly 7%, and Advanced Micro Devices and Qualcomm each shed more than 6%.

Alphabet remained under pressure, falling another 2% in premarket trading after sliding 5% in the previous session amid concerns over the departure of prominent AI talent from the company.
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Investors are now closely watching Micron's quarterly results due on Wednesday for fresh clues on demand trends in the memory-chip market. The earnings report is expected to provide a key test for investor confidence in the broader AI-driven semiconductor rally.

Despite the risk-off mood in equities, crude oil prices remained relatively stable. Brent and West Texas Intermediate futures traded largely flat after the United States granted a 60-day waiver on oil sanctions against Iran, a move seen as supporting ongoing diplomatic and nuclear negotiations between the two countries.

Among individual movers, IBM rose more than 4% after JPMorgan upgraded the stock to "overweight," citing improving recurring revenue, margins and cash flow driven by its software business. Qualcomm slid 6% after Bloomberg News reported, citing people familiar with the matter, that the company is in advanced talks to acquire AI software infrastructure startup Modular in a deal valued at roughly $4 billion. Oracle fell 2% after disclosing in a regulatory filing that it reduced its workforce by about 21,000 employees, or nearly 13%, over the past year.

Why Are The Markets Falling?

The rout was led by the KOSPI in South Korea, which fell 10% on Tuesday, triggering a circuit halt to trade as well.

This fall on the KOSPI came after a local media report stated that SK Hynix, one of the two major heavyweights behind the recent rally on the stock, is slowing the expansion of its AI memory chip production and shifting focus to the cheaper commodity DRAM.

As a result of the report, shares of both SK Hynix and Samsung Electronics plunged 12.5% each, triggering warning signs for US tech stocks as well, as investors rushed to book profits.

Despite this fall, shares of SK Hynix are up 277% for the year so far, while those of Samsung are up over 140%.

“Any headline that can be read as ‘AI-memory demand might be plateauing’ gets sold hard right now,” said Amanda Lyons, head of research at Energy Group Capital. “The vulnerability is in the positioning and the valuation, not in the buildout.”

The Nasdaq was an underperformer on Monday as well, ending 1% lower, dragged by Alphabet, which declined 5% after the exit of two high-profile AI division engineers, who quit to join rivals OpenAI and Anthropic.

While some analysts believe that such corrections are healthy and will provide entry points for other investors, some believe that the move in Korean stocks could be exaggerated due to heavy participation of retail investors.

SpaceX was the other major talking point on Monday with a 16% plunge, after the company proposed a $20 billion bond offering. The stock is now just 15% above its issue price of $135, having risen to a post-listing high of $225. Shares of Micron will also be in focus ahead of their results on Wednesday, with the stock having gained over 200% already so far this year.