AI stock sell-off deepens globally

A broad sell-off in artificial intelligence (AI) and semiconductor stocks has intensified over the past weeks, dragging major global indices lower. The Philadelphia Semiconductor Index fell over 10% in two sessions, with Nvidia, Micron Technology, Broadcom, and AMD among the hardest hit. The sell-off was triggered by concerns that AI-related stock prices have risen too far, too fast, and that demand for memory chips and processors may not be sustainable. Additional pressure came from news that Chinese startup DeepSeek is developing its own AI chip, and that Moonshot AI unveiled a new open-source model, Kimi K3, potentially increasing competition. The weakness spread from Wall Street to Asia, with Japan's Nikkei 225 and South Korea's KOSPI suffering sharp declines. Oil prices rose due to escalating U.S.-Iran conflict and threats to the Strait of Hormuz, adding to inflationary pressures and raising the likelihood of interest rate hikes by central banks. The United States — Federal Reserve, European Union — European Central Bank, and South Korea — Bank of Korea have signaled or implemented rate increases. Despite the sell-off, many AI stocks remain up significantly year-to-date. The event has also impacted IPOs, with SpaceX's stock falling below its IPO price and SK Hynix's U.S. listing starting trading amid volatility.