Seoul leads steep Asian losses as AI-led tech rally hits wall

Asian stock markets suffered steep losses on June 8, with Seoul’s Kospi index diving more than 8% to lead declines across the region. The sell-off targeted tech-heavy markets, including South Korea, Taiwan, and Japan, as investors pulled back from AI-driven rallies following stronger-than-expected US jobs data. The report, released Friday, showed May job growth double expectations, reinforcing bets on a Federal Reserve interest rate hike. US Treasury yields rose, and the dollar strengthened against major currencies, extending Wall Street’s losses from the previous day. The Nasdaq dropped 4% on Friday, and the downturn spread to Asia, where Seoul’s chipmakers Samsung and SK hynix fell 9% and 6%, respectively. Taipei and Tokyo also sank over 5% and 4%, while Hong Kong, Shanghai, and Singapore saw significant declines. The AI sector, which had driven market gains, faced renewed scrutiny after Broadcom reported weaker-than-expected third-quarter revenue. Analysts cited overvalued AI stocks and fading hopes for Middle East peace as additional concerns. Tensions escalated after Israel struck Iranian targets in Tehran, Tabriz, and Isfahan, following Tehran’s earlier warning after strikes on Beirut. Bitcoin also fell below $60,000, its lowest since October 2024, as broader market uncertainty grew. Investors now anticipate higher borrowing costs and reduced appetite for high-growth tech stocks. The sell-off underscored vulnerabilities in markets fueled by AI speculation, even as geopolitical risks added to the downward pressure.