Sharp drops in Big Tech companies pull stocks lower on Wall Street

Global stocks fell as concerns about higher interest rates triggered a sell-off in AI and technology shares.

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NEW YORK: Stocks fell on Wall Street Tuesday (Jun 23) as a sell-off in big technology stocks spread from Asia back to the US over worries about potentially higher interest rates by the end of the year.

The S&P fell 0.9 per cent and is coming off 11 weekly gains out of the last 12, led largely by technology stocks. The Dow Jones Industrial Average, which is less influenced by technology stocks, fell 8 points, or less than 0.1% as of 10:42 a.m. Eastern. The Nasdaq composite fell 1.4 per cent.

Markets throughout Asia fell, including a 10 per cent slump for South Korea’s Kospi. Stocks in Europe also fell.

Technology stocks were the biggest weights on the market, especially companies that have seen their values surge amid the frenzy over artificial intelligence technology. Their pricey stock values give them more influence over the broader market’s direction. On Tuesday, more stocks were gaining ground within the S&P 500 than falling, but tech companies were overpowering gains elsewhere.

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Micron Technology slumped 9.7 per cent and Nvidia fell 2.6 per cent. Samsung Electronics slumped 12.3 per cent in South Korea.

SpaceX wavered in early trading and was most recently up 1.8 per cent. The space exploration and artificial intelligence company had a soaring market debut less than two weeks ago. The company plans to raise money through a bond offering, partly to fund artificial-intelligence development.

The growing likelihood of interest rate hikes coming up this year has helped deflate the massive run-up in AI-related stocks in recent days as traders worry that the higher rates could hamper economic growth.

Those Big Tech gains have been significant, sending major indexes on record-setting runs throughout 2026. Within the S&P 500, the tech sector alone is up 27 per cent just over the last three months and 18% for the year. In Asia, South Korea's Kospi has nearly doubled so far in 2026.

Many technology companies have been spending heavily on AI technology. The potential for higher interest rates can stifle future spending and hurt prices for investments. The Federal Reserve has signaled that it could raise interest rates at least once before the end of the year. Wall Street is betting on an 85% chance that the central bank will raise its benchmark interest rate this year. That's versus 60% a week earlier.

The yield on the 10-year Treasury fell to 4.49 per cent from 4.51 per cent late Monday. The yield on the 2-year Treasury fell to 4.20 per cent from 4.24 per cent late Monday. Bond yields remain high, though, amid worries about inflation.

Inflation has been heating up throughout the year. The impact from tariffs helped scuttle what had been an easing of inflation growth, but the US war with Iran quickly pushed energy prices higher, including gas prices. Higher energy costs have also made shipping more expensive for a wide range of goods, and that has been weighing on businesses and households.

A report earlier in June revealed that consumer prices rose 4.2 per cent in May from a year earlier, their highest level in three years. A separate report due Thursday of an inflation measure that is preferred by the Fed is expected to show that inflation rose again, to 4.1 per cent, in May.

Oil prices have eased amid negotiations between the US and Iran to end their war. The price for a barrel of US crude fell 1.7 per cent to US$72.60. The price for a barrel of Brent crude, the international standard, fell 1.7 per cent to US$76.54. Prices are still higher from levels of roughly US$70 per barrel before the war began.

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