The Nasdaq, New York's tech-heavy index, entered correction territory on Tuesday following a global rout in chip stocks. The index fell nearly two per cent at the US market open, nearing the 10 per cent decline required for a technical correction.
Losses were concentrated in semiconductor companies, with investors reportedly questioning the scale of AI firms' investment plans. South Korea's Kospi index, which has been seen as a bellwether for chip firm sentiment, shed more than 10 per cent of its total market capitalisation in a single session, forcing a trading halt for the third time in weeks.
Shares in memory firm Sandisk dropped over 13 per cent on Tuesday, adding to an 11 per cent fall from the previous session. The company has reportedly lost more than half its value this month, while Western Digital is down 30 per cent.
The FTSE 100 closed 0.8 per cent higher on Tuesday, having lagged other indices for much of the year. In contrast, the Kospi has risen nearly 40 per cent this year, despite a recent decline of almost a third from its early June high.