Volatility has returned to the stock market, and AI is once again the culprit. A mild US tech sell-off Monday carried over into Asia Tuesday, with the Kospi index in South Korea tumbling 10% and tripping a circuit breaker that led to a 20-minute cooling-off session.
US Market Impact
The US tech market is also feeling the effects, with the tech-heavy Nasdaq dropping 2.2% Tuesday morning, one day after falling 1.3%. The broader S&P 500 fell 1.5%, and the Dow was 350 points lower at the opening bell, or 0.68%. Wall Street’s fear gauge jumped 17%, signaling elevated market volatility.
Some market analysts pointed to jitters sparked by Google and SpaceX falling somewhat sharply Monday. Google’s 5% decline was mostly because of a high-profile AI leader defecting to Anthropic, and SpaceX – which dropped 16% Monday – has some post-IPO jitters that are typical for companies whose stocks boom right out of the gate.
Other analysts suggested the markets were reacting to the likelihood that the Federal Reserve may raise interest rates later this year. The problem, as always with markets, is no one knows how high the market will go. We could still be building the foundation.
Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.
