Tech Stocks Tumble as Iran-Israel Strikes Renew Rate Fears

Global stock markets took a sharp hit Monday as fighting flared again between Iran and Israel, sending investors scrambling out of high priced technology shares. South Korea's benchmark KOSPI plunged more than 8 percent to close at 7,484.41 after triggering circuit breakers early in the session. Samsung Electronics and SK Hynix, which dominate the index, dropped over 10 percent and 7 percent respectively as foreign and institutional money fled.

Japan's Nikkei 225 fell nearly 4 percent while Taiwan's TAIEX and Hong Kong's Hang Seng also posted sizable losses. The selloff followed Wall Street's worst session in over a year, where the Nasdaq Composite dropped more than 4 percent amid profit taking in artificial intelligence names. Chip stocks led the retreat after a strong May jobs report in the United States raised fresh doubts about near term interest rate cuts.

The renewed Middle East violence added to the unease. Iran launched missiles at Israel over the weekend, prompting Israeli strikes in response despite President Trump's public calls for both sides to stand down and preserve a fragile ceasefire. Oil prices climbed above 92 dollars a barrel on the news before easing slightly on hopes for de escalation. Such flare ups highlight how quickly distant conflicts can rattle supply chains and investor confidence far from the battlefield.

Analysts pointed to two main drivers behind the rout. First, the hotter than expected US employment data has markets repricing the odds of Federal Reserve tightening later this year. Goldman Sachs economists pushed their forecast for the next rate cuts all the way to 2027. Second, enthusiasm for AI related investments appears to be cooling after months of rapid gains that lifted companies like SoftBank and TSMC to record valuations. Broadcom's recent results and Micron's 13 percent drop on Friday accelerated the rotation out of those names.

In Seoul the local currency briefly hit a 17 year low against the dollar before verbal intervention from authorities helped it recover some ground. Trading volume surged as retail investors bought the dip while institutions continued selling. The KOSDAQ index fared even worse, falling more than 9 percent. Similar patterns appeared across the region as investors dumped semiconductor heavy holdings built up during the prior rally.

The episode underscores the tight linkage between American monetary policy signals and Asian export economies. A stronger US labor market, normally viewed as positive, now carries the risk of higher borrowing costs that could slow global growth. At the same time, the quick spillover from Iran Israel exchanges shows how fragile any regional truce remains when core strategic interests stay unresolved. Markets are pricing in that uncertainty along with the possibility that AI spending has outrun near term returns.

European chip stocks showed mixed early trading before rebounding modestly, suggesting the worst of the panic may be contained for now. Futures on the Nasdaq pointed to a partial recovery at the open, with Micron and Nvidia indicated higher after Friday's drubbing. Still, the broader message from the past week is that concentrated bets on a handful of technology themes remain vulnerable once macroeconomic or geopolitical realities intrude.