Tech stocks drop, pulling world shares down
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Stocks slumped on Wall Street Tuesday as a sell-off in big technology stocks spread from Asia back to the U.S. over worries about potentially higher interest rates by the end of the year.
The S&P fell one per cent and is coming off 11 weekly gains out of the past 12, led largely by technology stocks. The Dow Jones Industrial Average fell 0.2 per cent as of 12:10 p.m. ET. The Nasdaq composite fell 1.5 per cent.
Canada’s main stock index, the TSX/S&P, tipped into positive territory at midday.
Markets throughout Asia fell, including a 10 per cent slump for South Korea’s KOSPI. Stocks in Europe also slid.
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.
Chip companies were among the biggest losers in overnight trading, with Micron and Intel both down more than seven per cent. Qualcomm fell 6.3 per cent.
Micron Technology slumped 10 per cent and Nvidia fell three per cent. Samsung Electronics slumped 12.3 per cent in South Korea.
SpaceX wavered in early trading and was most recently up 5.7 per cent. The space exploration and artificial intelligence company had a soaring market debut less than two weeks ago. The company also plans to raise money through a bond offering, partly to fund AI development.
On the oil market, the price for a barrel of Brent crude, the international standard, was nearly unchanged at $76.88 US. Prices are still higher from levels of roughly $70 US per barrel before the war began.
CBC’s senior business correspondent Peter Armstrong breaks down why — even when the Strait of Hormuz is open again — getting markets back to pre-war levels is going to be a mammoth task.
Wall Street betting on higher interest rates
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 nearly 27 per cent just over the last three months and roughly 18 per cent for the year. In Asia, South Korea’s Kospi has nearly doubled so far in 2026.
Analysts have been warning that high-flying technology stocks could be due for a downturn.
“Viewed through this lens, a period of consolidation is reasonable, in…
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