Global Tech Selloff Weighs On Markets—Here’s Why Nvidia, Tesla And More Are Down

Drivers of the Drawdown

JPMorgan analysts point to "anxiety" ahead of Micron's earnings report, due Wednesday. The memory chip maker is viewed as a barometer for AI demand. Its shares dropped over 9% premarket. Concerns are mounting that memory supply could outpace AI infrastructure demand after a spending surge.

Simultaneously, rate expectations have shifted sharply. FedWatch tool data shows markets now price in a 4-4.25% rate by year-end, a steeper path than the single 25 bps hike expected last week. Rising oil prices from the Iran war are adding to inflationary pressure, forcing this repricing.

Crypto/Web3 Exposure: The Liquidity Sink

This isn't a contained equity event. The selloff functions as a major liquidity sink. Capital is being pulled from high-growth, speculative sectors—first. The crypto market, as a high-beta liquidity proxy, is directly exposed to this risk-off rotation. Declining appetite for AI infrastructure spending chips away at a core narrative powering both equities and associated crypto AI tokens.

SpaceX's 16.4% plunge Monday and further 2.6% drop Tuesday underscore the stress. Its post-IPO gains are nearly wiped out, highlighting investor skepticism toward tech capital expenditure, a theme that bleeds into Web3 infrastructure valuations.

Yield Sustainability Verdict

The tech trade is undergoing a "gut check moment," per Wedbush. For crypto, the key metric to watch is BTC and ETH funding rates relative to this tech drawdown. A sustained de-risking in Nasdaq names will pressure crypto liquidity. Current yield structures in DeFi, particularly those leveraged to AI narratives, face stress test from reduced venture and infrastructure spending momentum. Monitor Micron's report; a miss confirms the demand anxiety and extends the drawdown.