Tech stocks sell off as Nasdaq futures drop 2.8 percent

• A global sell-off hit technology and semiconductor stocks, with Nasdaq 100 futures pointing to a 2.8% decline.
• Chipmakers, including Samsung Electronics, SK Hynix, Micron (NASDAQ:MU) and ASML (NYSE:ASML) led heavy losses amid AI infrastructure cost concerns and rate hike worries.
• Investors rotated into defensive sectors while awaiting key earnings from Cerebras and Micron.

Technology stocks came under heavy selling pressure with Nasdaq 100 futures pointing to a 2.8% decline and S&P 500 futures down 1.4%.

The pullback followed sharp losses in Asian and European markets, with South Korea’s Kospi dropping nearly 10% and Japan’s Nikkei 225 falling 3.55%.

Chip stocks were hit particularly hard, with SK Hynix off more than 12% and Samsung Electronics among the biggest drags in South Korea.

Anxiety over the high cost of building AI infrastructure and potential Federal Reserve rate hikes contributed to the reversal in recent momentum, according to market participants.

Following the announcement, major indices were lower in premarket trading.

Broad semiconductor weakness saw Micron fall around 9% in premarket, ASML decline 5% in Europe, and the VanEck Semiconductor ETF shed roughly 5%.

Investors rotated into defensive names such as Walmart (NYSE:WMT) and Johnson & Johnson (NYSE:JNJ), which traded in positive territory, while Brent crude held near $78 per barrel after a U.S. sanctions waiver on Iranian oil.

The technology sector had been driven by strong momentum in artificial intelligence-related stocks, but recent sessions have seen that rally stall as concerns over valuations and crowding emerged.