Svmuu News: U.S. stock futures fell on Tuesday as a sell-off in large-cap tech stocks spilled over into Asian AI-related stocks, while investors awaited further developments in U.S.-Iran negotiations.
On Tuesday, the Asian tech sub-sector took a heavy hit, ending an eight-day winning streak, as stock markets in Japan and South Korea corrected across the board, with the South Korean market plummeting nearly 10%.Currently, mega-cap tech stocks are generally moving in lockstep. Alphabet is performing weakly, and SpaceX has also fallen as the IPO frenzy subsides. Market sentiment is gradually spreading to other leading tech stocks, prompting a return to caution toward the tech sector.
This shift stands in stark contrast to last year, when nearly all AI-related companies were viewed as “gold mines,” and any firm mentioning AI was eagerly pursued by the market. Now, however, the market is gradually entering a “show results” validation phase, with investors demanding that massive investments in AI infrastructure yield tangible returns.
This is particularly evident in companies like SpaceX, which has negative cash flow yet still raised $75 billion through its IPO. This shift is keeping market sentiment on edge, and this week’s focus will turn to earnings conference calls from Micron tech companies.“Many investors hold AI stocks and have realized substantial gains; any volatility could prompt them to reduce their positions to lock in profits,”
said Jian Shi Cortesi, a fund manager at Gam Investment Management. “Tech stocks are currently particularly sensitive to the interest rate outlook and potential rate hikes by the Federal Reserve.” (Jin Shi)