Mag7 stocks tumble in global tech sell-off, Nasdaq futures drop more than 2%

Selling pressure on Wall Street went global on Tuesday. According to CNBC, Nasdaq futures dropped more than 2% before the open as the Mag7 stocks fell in unison — Nvidia, Microsoft, Alphabet and Meta each shed between 3% and 5% at the open. The catalyst was a cluster of cautious notes from Goldman Sachs and Morgan Stanley questioning how long AI data-centre returns will take to materialise, combined with macro data that pushed the Federal Reserve's rate-cut timeline further out.

The wave moved fast across regions. In Asia, South Korea's stock market saw one of its sharpest declines in years into the Tuesday close: Samsung fell 8.2% and SK Hynix lost 9.7%. Taiwan's TSMC dropped more than 4%, while Tokyo's Nikkei 225 closed down 2.1%. At the European open, the STOXX 600 Technology index was down 3.4%, and Australia's ASX 200 lost 1.8%. Goldman Sachs strategist David Kostin wrote that « investor assumptions about the AI trade are starting to stretch reality », flagging a widening gap between valuations and realised capex returns.

Traders are now focused on how many rate cuts the Fed will deliver in 2026; futures markets had priced four cuts as recently as May and now imply only two. The US 10-year Treasury yield climbed 7 basis points to 4.38%, and the DXY dollar index rose 0.4%. US core PCE data later this week and Friday's payrolls report will determine whether this is a deeper repricing or a short-term panic.