23.06.2026 - Tech Sell-off
After several bumpy sessions in recent weeks that were followed by swift recoveries, technology stocks are heading for another tumble today, with Nasdaq 100 futures pointing sharply lower and tech-heavy Asian markets swept by heavy selling.
Korean regulators recently issued warnings over leveraged ETFs as margin debt and retail borrowing had reached extreme levels. The resulting deleveraging forced investors to reduce positions, amplifying the decline.
In South Korea, artificial intelligence winners SK Hynix and Samsung both plunged more than 12%, while Taiwan's technology sector remains under pressure after months of FOMO-driven speculation and a surge in retail borrowing. Foreign investors aggressively sold semiconductor stocks, contributing to a nearly 10% plunge in the Korean KOSPI index and temporarily triggering a trading halt.
Concerns over monetary policy, largely ignored by markets during the last two week, have resurfaced. Following inflation figures and the Fed's hawkish message, investors are finally increasingly worried that interest rates may remain higher for longer, a particularly challenging environment for highly valued technology stocks.
Markets:
Equities: Global sell-off driven by semiconductors and Nasdaq Futures falling nearly 3%
Bonds: Almost unchanged - US 2-year Treasury yield 4.21% US 10y yield at 4.50% and the Japanese 10y yield at 2.68%.
Commodities: Oil prices almost unchanged - WTI: USD 73/barrel, Brent: USD 77; Precious metal prices fall - gold trading at USD 4115 - silver USD 62
Currencies: USD strengthened against major currencies
Cryptos: following the sell-off - Bitcoin at USD 62k
Volatility: VIX index is up to 20
My View: The trigger was not one single event, but a classic late-cycle unwind. Excessive leverage, crowded AI positioning and renewed rate-hike fears collided at the same time. I have highlighted several times in recent weeks that investors should not ignore the risk of a market re-pricing as I expect interest rates remain higher for longer.
The market is lately driven by the retail investors, usually not a good sign and marking a late cycle stage. Institutional investors and insiders already moved to the sidelines.
The problem with crowded trades is that everyone rushes to the exit simultaneously. When valuations become detached from fundamentals, even minor disappointments can trigger outsized moves.
The weakness comes only days after the historic SpaceX IPO. After briefly surpassing a valuation of USD 2 trillion, the company is now at risk of losing that milestone again as investors reassess lofty valuations across the technology sector.
After years of seemingly endless gains, investors have grown used to buying every dip. Let’s see what happens this time.
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