Tech Stocks Tumble as Iran-Israel Strikes Renew Rate Fears

Asia’s stock markets suffered steep losses on Monday as renewed military exchanges between Iran and Israel combined with Wall Street’s sharp pullback in technology shares to trigger widespread selling. South Korea’s benchmark KOSPI plunged more than 8 percent to close at 7,484.41 after hitting an intraday low that activated the exchange’s circuit breaker. Japan’s Nikkei 225 fell 3.9 percent while indices in Taiwan and Hong Kong recorded smaller but still notable declines.

The sell-off followed Friday’s rout on Wall Street in which the Nasdaq Composite dropped 4.2 percent, its largest single-day decline in more than a year. Investors rotated away from high-priced artificial intelligence names after a stronger-than-expected U.S. jobs report raised expectations that the Federal Reserve could keep interest rates elevated for longer. Semiconductor giants Samsung Electronics and SK Hynix, which together account for a large share of the KOSPI, fell more than 10 percent and 7 percent respectively. Taiwan Semiconductor Manufacturing Company and Japanese tech-related firms also posted heavy losses.

Geopolitical tensions added to the pressure. Iran launched missiles toward Israel on Sunday in what officials described as a response to prior Israeli actions and alleged U.S. violations of an earlier understanding. Israel responded with strikes on Iranian defense infrastructure. Oil prices rose sharply, with West Texas Intermediate briefly topping 92 dollars a barrel and Brent crude approaching 97 dollars, reflecting worries that the fragile ceasefire brokered earlier this year could collapse. President Donald Trump urged both sides to halt further escalation, but markets registered the renewed fighting as an additional source of uncertainty.

The U.S. labor data that helped spark Friday’s declines showed job growth well above forecasts, prompting some analysts to push back expected rate cuts into 2027. That shift weighed on growth-sensitive technology valuations that had rallied strongly in recent months. Samsung and SK Hynix had both crossed the one-trillion-dollar market capitalization threshold only weeks earlier on optimism about AI demand. Monday’s moves reversed part of those gains across the region.

Foreign and institutional investors were heavy net sellers in Seoul, while retail buyers stepped in to absorb some of the volume. The Korean won recovered from an opening low after verbal intervention from financial authorities. In early U.S. trading, futures on the Nasdaq 100 pointed higher as some chip stocks showed signs of stabilization, yet the broader risk-off mood persisted amid the Middle East developments.

The episode underscores how quickly optimism around artificial intelligence can give way when macroeconomic signals shift and regional conflicts flare. Asian economies heavily tied to semiconductor exports absorbed the first wave of selling, while higher energy prices threaten to feed through to consumers worldwide. With both the geopolitical and monetary threads still unresolved, markets face continued volatility in the sessions ahead.