Chip Stocks in Freefall: $3 Trillion Wiped Out as Bond Yields Hit Decade Highs
Global markets are in turmoil as a massive selloff in semiconductor shares, triggered by soaring government bond yields and AI hype crumbling, has erased roughly $3 trillion from chip stocks.
A global selloff in technology shares, led by semiconductor companies, has wiped out billions in market value as rising government bond yields and inflation fears rattle investors. The Nasdaq Composite fell more than 1.5% on Tuesday, with the decline spreading from Asia to Europe and the U.S., marking the third straight day of losses for Wall Street [222802][221943]. The yield on the 10-year U.S. Treasury note hit its highest level in over a decade, making government debt more attractive than stocks and pressuring growth-oriented tech companies that rely on future earnings [222837][222852]. In Asia, South Korea’s KOSPI dropped over 2%, while European chip stocks plunged in early trading with losses accelerating throughout the session [222802][221626]. No single company or news event triggered the selloff, but analysts point to profit-taking after a prolonged rally and growing unease over sustained high interest rates and government borrowing costs [222802][221716]. The market turmoil follows the release of new Chinese AI models from Moonshot AI and Alibaba, which sparked panic selling before any verified performance data was published, contributing to the $3 trillion loss in global chip stocks [221144]. Meanwhile, banks have halved financing fees for leveraged bets on SK Hynix shares in an attempt to attract buyers back after the AI-related crash [222936]. Investors are now watching upcoming earnings reports and inflation data for clearer direction, with some analysts noting that while AI demand remains strong, the recent run to all-time highs has left stocks vulnerable to sharp corrections [222802][221710].