Major US technology indices dropped sharply on June 23, 2026, as investors worried about upcoming Federal Reserve interest rate increases and heavy borrowing by tech firms to fund AI infrastructure [1, 2]. The Philadelphia Semiconductor Index fell nearly 7.9%, with all 30 component stocks closing lower [1, 2, 3, 4, 5]. Micron and SanDisk shares declined 11-13%, and South Korean chipmakers SK Hynix and Samsung Electronics slid over 10%, dragging down US memory stocks [1, 2, 5].
The Nasdaq Composite lost about 2-2.2%, with Nvidia down 3-4%. Other major tech companies including Microsoft, Alphabet, Apple, Meta, Amazon, and Tesla also retreated [1, 2, 6, 7, 8]. SpaceX stock plunged over 16% during June 22-23, falling below its IPO opening price of $150, as investor sentiment soured amid the sell-off [1, 6, 7, 8]. Senior market analyst Ipek Ozkardeskaya said, "SpaceX joining the debt market to fund massive AI infrastructure spending is causing investor worries. They fear tech giants are borrowing too much to handle AI costs" [1].
The sell-off was driven by fears of hawkish Fed monetary policy under new Chair Wash, with markets pricing in about a 50% chance of two rate hikes by year-end, according to Fundstrat co-founder Tom Lee, who said, "Yield has become a headwind, and the market expects more Fed rate hikes between now and year-end" [1, 2, 9]. The large US tech stocks known as the MAG7 officially entered correction territory on June 23, falling more than 10% from recent highs [9, 10]. Wedbush fund manager Roger described the MAG7 decline as profit-taking and a healthy rotation to other AI beneficiaries such as memory chip firms rather than panic selling [9].
Tech giants Alphabet, Amazon, Meta, and Microsoft are expected to spend about $700 billion on AI-related capital investments in 2026 [9, 10]. Nobel laureate economist Paul Krugman said the semiconductor plunge reflected a "quasi-bubble quasi-bursting" caused by hype and social momentum around AI rather than solid fundamentals. He noted corporate AI strategies have shifted from maximizing usage to cutting costs due to expensive computation, indicating likely slowing AI demand [5]. Microsoft CEO Satya Nadella remarked that firms should adopt less costly AI models, including options from China like DeepSeek [5].
Despite the sell-off, Fundstrat’s Tom Lee noted that historical semiconductor drops over 6% in one day usually present buying opportunities, with high odds of gains over 1 to 6 months [3, 4]. On June 24, US stock indices mostly recovered during morning trading ahead of Micron’s after-market earnings report, with expected EPS of $20.83 and revenue of $35.75 billion for the quarter [11, 12]. Oil and gold prices also fell, with Brent crude dipping below $75 per barrel and gold dropping below $4,000 an ounce [11, 12].
On June 22, US and Iranian officials agreed on a roadmap to finalize a deal within 60 days, lifting some sanctions and contributing to lower oil prices and improved market sentiment [7, 8]. The Taiwan stock market surged over 1,200 points to a record high on June 22, boosted by gains in semiconductor and AI-related stocks including TSMC and Nvidia [7, 8]. Nvidia is scheduled to hold its 2026 shareholder meeting on June 25, amid strong AI-driven momentum in the semiconductor sector [7, 8].
