On the 22nd (local time), the New York stock market closed lower, led by mega-cap tech stocks. The sell-off began after SpaceX, which went public last week at a valuation of $75 billion, disclosed plans to issue $20 billion in bonds. Profit-taking spread across the broader tech sector, sending major indexes down across the board.
SpaceX, led by Elon Musk, moved to raise additional funds just 10 days after its listing. The planned issuance amounts to $20 billion, or about 27 trillion won at an exchange rate of 1,370 won per dollar.
The company made its rationale clear. It said the money would be used to repay a short-term bridge loan taken out during its acquisition of AI companies. It also disclosed that it held more than $100 billion in cash.
The market reaction diverged from the company’s explanation. Investors grew concerned that even a company with ample liquidity choosing to take on more debt could mean cash for AI infrastructure investments is being depleted faster than expected. The suspicion spread beyond one company’s finances to the broader industry, which is pouring enormous sums into artificial intelligence.
The sell-off quickly shifted to major tech names. Alphabet fell 4.99%, while Amazon dropped 4.75%. Microsoft declined 3.18% and Meta lost 2.32%. All are companies that operate vast data centers and have invested heavily in AI.
In the industry, these firms are called hyperscalers—a term referring to big tech companies that run data centers at enormous scale. The decline reflected market fatigue over such massive investment.
Semiconductors moved in the opposite direction that same day. Companies making the actual components for AI infrastructure held firm. Memory chip maker Micron rose 6.82%. Storage makers SanDisk and Seagate climbed 4.07% and 2.22%, respectively.
The gains among server assemblers were even larger. Dell rose 2.25%, while Super Micro Computer surged 15.7%. Money worried about an AI bubble split away from money buying the components that are actually used in AI.
The indexes also ended mixed. The S&P 500 and Nasdaq fell 0.37% and 1.32%, respectively. By contrast, the Dow Jones Industrial Average rose 0.29%, and the Philadelphia Semiconductor Index, which tracks chip stocks, gained 2.04%. A rotation trade unfolded, with real estate, energy and healthcare filling the gap left by tech. Money flowed out of one sector and into others.
Another force moving markets that day was the Middle East. U.S.-Iran postwar reconciliation talks began to take clearer shape.
U.S. Treasury Secretary Scott Bessent said on social media that a 60-day temporary license had been issued allowing Iranian oil exports. He cited Iran’s agreement to guarantee freedom of passage through the Strait of Hormuz and to admit inspectors from the International Atomic Energy Agency (IAEA). The Strait of Hormuz is a key passage through which a significant share of the world’s oil flows.
Earlier, high-level talks in Switzerland reportedly led the two countries to agree on a schedule toward a permanent peace agreement within 60 days, according to representatives of the mediating nations. Expectations grew that Iranian crude, blocked by war, would return to the market.
Those expectations quickly translated into prices. West Texas Intermediate crude settled down 2.32% at $74.82 per barrel. Market logic worked as expected: when supply increases, prices fall.
What moved in the opposite direction was interest rates. When oil prices fall, inflation pressure often eases and rates stabilize. That was not the case on this day.
The market is viewing the Federal Reserve as more hawkish.
The reason lay with the Federal Reserve. The number of investment banks expecting the Fed to raise its benchmark rate one more time before year-end has recently increased. The central bank’s resolve to curb inflation weighed more heavily than the relief provided by lower oil prices.
Bond yields reflected that view. The U.S. two-year Treasury yield, which is sensitive to policy rate expectations, rose 0.048 percentage point to 4.23%. The benchmark 10-year yield also climbed 0.055 percentage point to 4.51%. Higher yields mean a higher cost of borrowing.
The dollar also strengthened. The dollar index, which measures the greenback against major currencies, rose 0.15% to 101.0, reflecting capital flowing into the United States as rates rise.
The day’s trading confirmed one thing: the market’s faith in AI is no longer a single block. Investors are beginning to view big tech companies making massive investments differently from the suppliers directly benefiting from those investments. And they are starting to assess when the bill for debt-fueled growth will come due.