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Or sign-in if you have an account.An S&P 500 chart on the floor of the New York Stock Exchange. Photographer: Michael Nagle/Bloomberg Photo by Michael Nagle /Bloomberg(Bloomberg) — US technology stocks are set to slump on Tuesday after a selloff in Korean chipmakers stoked concerns about the sustainability of the artificial intelligence-related rally.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorContracts on the Nasdaq 100 fell 2.6% as of 5 a.m. in New York, while S&P 500 futures dropped 1.4%. In Europe, the technology sub-index of the Stoxx 600 fell 3.1%.A sub-gauge of Asian technology shares tumbled, ending an eight-day winning streak. South Korea’s Kospi Index fell more than 8%, triggering a circuit breaker, after a local media report said SK Hynix Inc. is slowing expansion of AI memory chip production and shifting emphasis to the cheaper commodity DRAM.Shares of SK Hynix and Samsung Electronics Co. each plunged more than 10%. The sharp drop in Korean chip bellwethers suggests investors are moving quickly to lock in recent gains, a warning sign for US tech stocks.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“Any headline that can be read as ‘AI-memory demand might be plateauing’ gets sold hard right now,” said Amanda Lyons, head of research at Energy Group Capital. “The vulnerability is in the positioning and the valuation, not in the buildout.”Read: Stocks Slump on Tech Selloff, Oil Edges Lower: Markets WrapTuesday’s moves follow the previous session’s selloff in US tech heavyweights as doubts emerged over hyperscalers’ colossal AI spending. Separately, SpaceX shares fell to the lowest level since their first day of trading as Elon Musk’s rocket firm embarked on a sale of investment-grade bonds. The stock was down 4% in premarket trading on Tuesday.The rapid buildout of AI data centers has led to a severe squeeze in more traditional memory chips, including the DRAM products that are used in everything from mobile phones and computers to electric vehicles. Mark Li, a Bernstein analyst who tracks the semiconductor industry, warned earlier this year that memory chip prices are going “parabolic.”Vey-Sern Ling, managing director at Union Bancaire Privee in Singapore, said that if SK Hynix is shifting investment into DRAM, it’s probably a reflection of the company’s view on the potential profits in that market.“It just means they think margins on commodity DRAM are better than HBM4,” he said, refering to high bandwith memory chips. “There’s still a sharp global supply shortage in memory.”SK Hynix declined to comment on the report.The rally in US technology stocks has faltered this month as investors worry that share prices may be overheating. Still, the Nasdaq 100 remains more than 30% up compared with end-March, and some market participants said the breather was likely to be short-lived.“A market drop, even with heavy volatility, is healthy and will provide entry points for other investors,” said David Kruk, head of trading at La Financiere de l’Echiquier. However, David Rainville, lead manager of the Sycomore Sustainable Tech fund, noted that moves in Korean stocks could be exacerbated due to a heavy participation of retail investors.Attention will soon be shifting to Micron Technology Inc.’s quarterly results on Wednesday. The stock has been this year’s top performer in the Philadelphia Semiconductor Index, rallying more than 300% since January.“Many investors are sitting on large gains with their AI stocks, and any jitters could lead them to cut their position to lock in the gains,” said Jian Shi Cortesi, a fund manager at Gam Investment Management. “Right now tech stocks are also particularly sensitive to interest rate outlook and potential Fed rate hikes.”—With assistance from Sagarika Jaisinghani, Michael Msika and Yoolim Lee.(Updates moves, adds context on recent selloff in sixth paragraph, comment on chip trends in paragraphs 7-10.) Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.