Global stock markets took a sharp turn downward on Wednesday, fueled by a tech-sector sell-off and rising concerns that equity valuations have become overstretched. Asian markets were hit hardest: Japan’s Nikkei sank 4.6% and South Korea’s KOSPI dropped up to 6.2%. A broad measure of Asia-Pacific shares outside Japan suffered its largest two-day loss since April.
The slump followed warnings from Wall Street executives at firms like Morgan Stanley and Goldman Sachs, who questioned whether the recent rally led by artificial-intelligence stocks could continue.
Tech names took heavy hits. For example, shares of SoftBank Group in Japan dropped more than 10% amid worries over its tech holdings. Even firms with strong results — such as Palantir Technologies — saw stock declines, underlining investor scepticism about lofty valuations.
With equities pulling back, investors sought safer assets. The Japanese yen and Swiss franc both strengthened, while the U.S. dollar held up. Safe‐haven flows also helped push Treasury yields lower.
Despite the rout, analysts suggest the move may be more of a profit‐taking pause than a full market meltdown. They note that fundamentals haven’t collapsed, but the risk narrative is shifting.
For now, the key question is whether this correction extends into other sectors or remains focused on tech. Markets are watching closely as uncertainty builds around interest-rate policy, earnings growth and global growth.
