Seoul leads steep Asian losses as AI-led tech rally hits wall
An electronic quotation board displays the Nikkei 225 stock prices on the Tokyo Stock Exchange in Tokyo on Jun 8, 2026. (Photo: AFP/Kazuhiro Nogi)
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HONG KONG: Seoul’s Kospi stock index dived more than eight per cent to lead a rout across Asia on Monday (Jun 8) as tech firms were hammered and strong US jobs data fuelled bets on a Federal Reserve interest rate hike.
News that Iran and Israel had struck each other sparked worries about an escalation of the Middle East crisis, adding to the gloomy mood on trading floors and sending oil prices surging more than three per cent.
The technology sector bore the brunt of losses Monday as investors cashed out following a breathtaking surge in recent months powered by a race into all things linked to artificial intelligence.
The selling came after a closely watched report Friday showed more than double the amount of US jobs than expected were created in May, while those in the previous two months were revised higher.
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Analysts said that showed the world’s top economy remained resilient in the face of surging prices, but ramped up bets on the Fed raising interest rates.
Yields on US Treasury bonds rose as investors anticipated higher rates, while the dollar strengthened against its main rivals.
All three main indexes on Wall Street tumbled Friday, led by a four per cent drop in the Nasdaq.
That heavy selling extended into Asia, where tech-rich markets felt the most pain.
Seoul – which has hit multiple record highs this year – tanked as much as 8.8 per cent at one point as chipmaker Samsung shed nine per cent and rival SK hynix lost six per cent.
Taipei sank more than five per cent and Tokyo more than four per cent.
There were also hefty losses in Hong Kong, Shanghai and Singapore.
Bitcoin was hovering around US$63,000 after sinking below US$60,000 Friday to its lowest level since October 2024, just before Donald Trump’s election, which propelled it to a record high.
“Stronger-than-expected labour market data reignited concerns that the Federal Reserve may be preparing to embark on a new tightening cycle,” said SPI Asset Management’s Stephen Innes.
He added that “fading hopes for progress in Middle East peace negotiations kept energy markets on edge, and a handful of disappointing guidance updates from major technology companies interrupted what had become an increasingly one-way artificial intelligence trade”.
Investors were already concerned about extended valuations in the AI realm, which has been the main catalyst for a global market surge in the past two years, eclipsing worries about the Middle East crisis.
US chipmaker Broadcom’s below-forecast revenue outlook for the third quarter added to those concerns.
Fears about a re-escalation of the Iran war pushed crude prices sharply higher after Israeli said Monday it had struck targets in western and central Iran, as Iranian state TV reported explosions in the cities of Tehran, Tabriz and Isfahan.
The attacks came a day after Israel said its military intercepted incoming Iranian missiles, the first such barrage since an April ceasefire took hold.
Tehran called the attack a “warning” after strikes on Beirut’s southern suburbs.
Source: AFP/ec
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