Global markets are experiencing a chain reaction of selling as investors grow increasingly uneasy with elevated technology stock prices and stretched valuations. U.S. stock index futures are declining in pre-market trading.

At 6:49 a.m. New York time, S&P 500 futures were down 1.4%, Nasdaq 100 futures had plunged 2.8%, and Dow Jones futures were lower by 0.6%. Memory-related stocks were among the hardest hit, with many having posted triple-digit percentage gains this year. SpaceX initially extended its decline, threatening to fall below its $150 opening day price, but later managed to rebound.

In Seoul, chip giants SK Hynix and Samsung Electronics both tumbled more than 10%. In U.S. pre-market trading, Intel (INTC) and Micron Technology (MU) led chip stocks lower.

Widespread Pressure on the Sector

Chip stocks faced a sell-off on Tuesday, a sector that had previously been one of the biggest beneficiaries of the artificial intelligence trade. This followed a pullback in shares of hyperscale cloud service providers the previous day, as investors began questioning whether future returns would be sufficient to justify current spending levels. Expectations that U.S. monetary policy easing may be less aggressive than previously hoped are also intensifying this retreat.

Focus on Upcoming Earnings

Within the AI trade, market focus has now shifted to Micron Technology's quarterly results, scheduled for release on Wednesday. The stock has surged more than 300% since January.

Amanda Lyons, Head of Research at Energy Group Capital, stated: "The real test is Micron. I'm more focused on the rate of change in pricing and whether there is any shift in capital expenditure or memory supply guidance, rather than whether key performance metrics simply beat or miss expectations."