US stock markets experienced their worst losses since 2022 on Wednesday as investors rapidly sold shares in companies that had surged with the AI boom.
Asian shares followed suit overnight, with Tokyo’s Nikkei 225 losing more than 1,000 points at one point due to growing pessimism surrounding Wall Street’s “Magnificent Seven” megacap companies.
Japan’s benchmark Nikkei 225 fell by 3.1% to 37,949.50. Australia’s S&P/ASX 200 dropped 1.2% to 7,870.40.
South Korea’s Kospi decreased by 1.5% to 2,717.72, while Hong Kong’s Hang Seng fell by 1.7% to 17,010.89, and the Shanghai Composite dipped 0.5% to 2,887.48.
In the technology sector, Samsung Electronics saw a 2% decline, Nintendo dropped nearly 2%, and Tokyo Electron plunged almost 5%.
These declines followed disappointing earnings reports from Tesla and Alphabet, Google’s parent company, which triggered a significant drop in US stocks.
The S&P 500 fell by 2.3% to 5,427.13, and the Nasdaq dropped 3.6% to 17,342.41, marking its worst day in two years. The Dow Jones Industrial Average declined by 1.3% to 39,853.87.
The yield on 10-year Treasury bonds increased to 4.28% from 4.25% late Tuesday.
The world’s only $3 trillion companies all contributed to the market downturn, with Nvidia dropping 6.8%, Apple falling 2.9%, and Microsoft declining 3.6%. Tesla saw a significant drop of 12%.
Sam Stovall, chief investment strategist at CFRA, noted that while this week’s profit reports from Tesla and Alphabet were not disastrous, they prompted investors to question whether other major companies might also fall short of expectations.
He remarked, “How many disappointments are we likely to see? Maybe let’s sell first and ask questions later.”
