A broad-based selloff in technology stocks, initially led by the Magnificent 7 and Apple, has spread into Asian markets, significantly impacting risk sentiment and US equity futures, according to Deutsche Bank strategists [1]. The KOSPI index in South Korea slumped -8.01% and Japan's Nikkei dropped -4.54%, with SoftBank falling around -14% following reports that OpenAI may delay its IPO until 2027 [1]. The Shanghai Composite and Hang Seng indices also declined, down -2.14% and -1.87% respectively [1]. US equity futures reflected the negative sentiment, with S&P 500 futures down -0.71% and NASDAQ futures off -1.45%, while European Stoxx futures were lower by -0.79% [1].
The selloff followed a sharp decline in the Magnificent 7 index (-2.54%) and a notable drop in Apple shares (-6.12%) after news that Apple would be raising the price of its Macs and iPads [1]. Despite these tech sector losses, the broader US market showed resilience: the Philly Semiconductor index surged +3.59%, led by Micron's impressive +15.7% gain after its earnings results [1]. Additionally, the equal-weighted S&P 500 rose +0.67% and the small-cap Russell 2000 advanced +0.71%, indicating that market weakness was concentrated in mega-cap tech rather than the entire market [1].
In Europe, investors continued to reduce expectations for further ECB rate hikes, with the number of hikes priced by the December meeting falling to just 26bps, down -3.2bps on the day [1]. This dovish shift helped push the STOXX 600 to a record high (+0.80%), with gains also seen in the DAX (+1.03%), CAC 40 (+0.55%), and FTSE 100 (+0.65%) [1]. However, these gains were expected to reverse at the open due to the overnight tech-led selloff [1].
Overall, while headline indices were pressured by tech weakness, especially in mega-cap names, strength in semiconductors and small caps suggested a more nuanced market backdrop [1].
CONCLUSION
The global tech selloff, led by declines in mega-cap US tech stocks and spreading to Asian and European markets, has weighed heavily on risk sentiment. However, strong gains in semiconductors and small-cap stocks indicate underlying resilience in broader equity markets. Investors remain cautious, with market direction likely to hinge on further developments in the tech sector and central bank policy expectations.