Asian Chip Stocks Plunge Ahead of Non-Farm Payrolls, U.S. Futures Under Pressure
Alina Collins
Hours before the June nonfarm payrolls report — moved up to July 3 for the Independence Day holiday — Asian chip stocks sold off hard. SK Hynix dropped 14.57% in a single session, with the core fear shifting from AI promise to AI overcapacity.
How deep was the Asia sell-off?
South Korea's KOSPI fell 7.89%; Japan's Nikkei 225 lost 2.47%.
SK Hynix plunged 14.57%, Samsung Electronics dropped 9.06%, and Japan's Kioxia — which just became Japan's most valuable listed company last month — slid sharply.
This means → the sell-off is concentrated in memory chips, the segment most exposed to a repricing of AI hardware demand.
Why are chip stocks the epicentre?
Jefferies chief European economist Mohit Kumar said the decline reflects concerns about AI-related overcapacity at big tech companies.
Bloomberg previously reported that Meta is planning a cloud business to sell excess computing power to outside clients — stoking fears of supply glut.
Meta CEO Mark Zuckerberg said at the company's annual shareholder meeting: "If we believe compute is overbuilt, then [selling it] is an option."
In plain terms = when the company spending the most on AI capacity is already thinking about offloading the surplus, the market reads it as a signal: too much has been built, and demand may not keep up.
How are U.S. futures and other markets reacting?
Pre-market, Micron and Nvidia both traded lower. Nasdaq 100 futures fell about 0.33%, Dow futures dipped 0.18%, and S&P 500 futures were roughly flat.
The yen strengthened against the dollar after touching a 40-year low near 160 earlier this week, raising expectations of intervention by Japanese authorities.
Brent crude fell to $70.65 a barrel, down 1.29%, extending its recent slide.
What is the market waiting for tonight?
June nonfarm payrolls will be released at 8:30 a.m. ET on July 3 — one day early because of the July 4 holiday.
The Wall Street Journal survey expects 115,000 new jobs; Business Insider cites 113,000 — both well below May's 172,000. The unemployment rate is expected to hold at 4.3%.
This week's ADP private-payroll print came in soft, cooling expectations further. World Cup hosting may give a short-term lift to leisure and hospitality hiring, but analysts warn this could distort the headline number — meaning it may look better than the underlying trend.
What happens after the number drops?
If payrolls come in above expectations → a September Fed rate hike becomes more likely, putting near-term pressure on equities.
If the print is below expectations → more uncertainty over the policy path for the rest of the year.
This means → strong or weak, tonight's number will directly reset market bets on the Fed's next move.
Content is for reference only, not financial advice.