The AI boom is supposed to lift tech stocks. Right now it is doing the opposite.
Some of the biggest names in AI just had a rough day, and the reason might be AI itself.
Japan's SoftBank led the drop, falling 8.3%. The slide came after a funding plan hit a snag.
SoftBank wanted to raise at least $6 billion through a loan backed by its OpenAI stake. A loan like that uses your stock as backing.
So it only works when the stock holds up. With the shares falling, the plan got harder to pull off.
The pain spread fast. South Korea's SK Hynix fell 7.5%, Samsung dropped 6.1%, and LG Display sank almost 8%.
Taiwan's TSMC slipped about 2%, and chip-gear makers Advantest and Renesas fell in Japan too. Even ASML, Europe's most valuable company, edged lower.
All of it tracked a weak day on Wall Street. There, the tech-heavy Nasdaq fell almost 1%, with Nvidia and Microsoft lower too.
Before the U.S. open, the main chip fund was down more than 2%. In London, the tiny-computer maker Raspberry Pi sank more than 12%.
The selling spared almost no one. Even some steady names took a hit.
We break down which AI moves Wall Street is really watching in Market Briefs - sent every weekday, with a free investing masterclass when you join.
Here is the twist. A wave of giant AI listings is pulling money out of stocks that are already public.
SpaceX is set to start trading Friday at around a $1.75 trillion value. That would make it possibly the biggest IPO ever.
OpenAI quietly filed to go public on Monday, with Anthropic in the mix too. To buy into deals that big, some investors are selling the tech they already own.
OpenAI is aiming to list this fall, while SpaceX could raise up to $75 billion. Sums that big can pull cash out of the whole market.
Some love it as fuel for the AI rally. Others worry that a $1.75 trillion price tag means things are running too hot.
When tech gets shaky, money often looks for a new home. One strategist expects some of it to move into Japanese defense stocks.
Fresh U.S. inflation data is also due this week, and it is expected to run hot near 4%. Traders see almost no chance of a Fed move next week, but about a 40% chance of a hike by October.
For now, markets are just jumpy, and one strategist tied the nerves to higher-for-longer rates and the grinding Iran war. A calm Fed next week could help.
Some funds may also sell their winners just to free up cash for the new deals. That alone can keep stocks on edge.
If you want this kind of read on the AI rally each morning, join the Market Briefs newsletter and get a 45-minute investing course as a bonus.
