Tech Stocks Drag Global Markets to Their Weakest Week in Seven Months

Global equity markets ended the week on a sour note as technology stocks led a broad sell-off, wiping out recent gains and sparking renewed concerns about the sustainability of this year’s AI-driven rally. The Nasdaq Composite slid nearly 1.9% overnight and closed the week down 2.8%, its steepest decline since early spring. The correction in major U.S. tech names—especially semiconductor and AI infrastructure firms—sent shockwaves through Asia and Europe.

In Asia, Japan’s Nikkei 225 fell 4.7% for the week, its worst performance since March, as investors took profits in chip-related exporters following months of rapid gains. South Korea’s KOSPI dropped 3.3%, weighed down by weakness in Samsung Electronics and SK Hynix. Analysts noted that while tech earnings have remained largely solid, valuations have run ahead of fundamentals, leaving markets vulnerable to even modest shifts in sentiment.

The sell-off coincided with a rotation into safer assets as bond yields slipped and the Japanese yen strengthened on haven demand. Investors also trimmed exposure ahead of next week’s U.S. inflation data and fresh central-bank commentary, both seen as critical to gauging how long interest rates will stay elevated.

In Europe, chipmakers and AI-linked hardware suppliers mirrored the downturn, while broader indexes such as the STOXX 600 retreated amid weaker risk appetite. Strategists say the pullback reflects not only profit-taking but also the recognition that capital markets may be entering a more selective phase—where companies must demonstrate tangible AI returns rather than rely on speculative momentum.

Despite the turbulence, many fund managers view this correction as a healthy reset after a months-long rally that had priced in aggressive growth assumptions. The focus now shifts to whether the upcoming corporate guidance season can reassure investors that AI and digital-infrastructure spending still justify current valuations