Micron and Intel are leading the decline, reflecting broader fears regarding the ballooning costs of AI infrastructure. Market participants are increasingly scrutinizing whether the massive capital expenditure required for AI development will yield commensurate returns, particularly as competitive pressures intensify. Evidence that China is rapidly narrowing the technological gap has further dampened enthusiasm for domestic chipmakers.

The cooling sentiment has already rippled across global markets. Asian exchanges faced a brutal sell-off on Tuesday, with Japan’s Nikkei index shedding 4% and South Korea’s Kospi dropping 10%. Simultaneously, the commodities market is adjusting to geopolitical shifts; Brent crude futures have retreated to approximately $84 a barrel. The decline coincides with diplomatic efforts by Iran and Oman to negotiate the reopening of the Strait of Hormuz, providing a rare moment of stability in a volatile energy sector.