US tech stocks have once again suffered a massive sell-off, following bets on a decline through 50 million option contracts. Analysts point the finger at SpaceX, arguing that the US stock market has become overheated.

According to the Financial Times, on Tuesday, US chip companies and stocks in the popular artificial intelligence sector were again subject to large-scale selling, putting pressure on the US stock market, which weakened. This Friday, SpaceX, a space exploration technology company, will go public, and concerns about its siphoning off market liquidity have resurfaced.

On the other hand, short positions in the market are increasing. Speculative short positions in S&P 500 index futures have reached a new high since last September.

During the midday trading session of the US stock market on Tuesday, the Nasdaq Composite Index tumbled 2.2% in a volatile manner, continuing its recent downward trend. The constituent stocks of this index are mainly technology companies.

Since the beginning of this year, a group of technology giants with high valuations have driven the US stock market to repeatedly hit record highs. However, on Tuesday, such stocks generally plunged significantly. The intraday declines of Intel and Dell's stock prices once exceeded 9% each. In the past three months, the stock prices of the two companies have cumulatively increased by 132% and 161% respectively.

The Financial Times quoted Manish Kabra, head of US equity strategy at Societe Generale, as saying: "The entire market has been overheated for a long time, and a correction is inevitable."

The S&P 500 index, which aggregates US blue - chip stocks, fell 2% on that day, but most of the constituent stocks in the index closed higher. The real estate, raw materials, and healthcare sectors, which had performed sluggishly for most of the year, all recorded considerable gains.

Some analysts believe that the decline of technology stocks in this round is due to investors adjusting their positions for SpaceX's unprecedented IPO. The fundraising scale of this IPO could reach up to $86 billion. Artificial intelligence startups OpenAI and Anthropic have also secretly submitted listing applications. The industry expects that if the two companies complete their listings later this year, their valuations will both reach approximately $1 trillion.

According to the Financial Times, Valerie Noel, head of trading at Syz Bank, a private bank and asset management company headquartered in Geneva, Switzerland, said: "Large - scale IPOs will undoubtedly siphon off market liquidity and also prompt investors to adjust their portfolios and reallocate funds to new targets."

Last week, Alphabet, the parent company of Google, announced that it plans to issue up to $85 billion in equity for infrastructure construction. The Financial Times previously reported that Meta is considering raising hundreds of billions of dollars through stock issuance. The two technology giants are making large - scale investments in artificial intelligence, further intensifying market concerns about the scale of technology companies' related investments.

Noel added: "Investors are re - examining the capital investment in the artificial intelligence field, questioning when the huge capital expenditure will generate returns, and also starting to move out of the popular sectors where funds have been concentrated in the past two years."

On Tuesday, the Vix index, which measures the implied volatility of S&P 500 index options, climbed to 23.17 at one point, reaching a new high since early April. Generally speaking, during periods of sharp stock market fluctuations, investment banks are often reluctant to promote corporate listing projects.

Data released by the US Commodity Futures Trading Commission last week showed that speculative short positions in S&P 500 index futures reached a new high since last September, which also reflects that investors are becoming more cautious about the US stock market's rally this year.

The yield on US Treasury bonds declined slightly on Tuesday but remained at a high level after the release of last Friday's employment data. Affected by the employment data, traders are betting that the Federal Reserve will raise interest rates by 25 basis points in December this year.

According to The Wall Street Journal, data from Cboe Global Markets showed that in the technology stock selling spree last Friday, more than 50 million put option contracts changed hands, setting the second - highest single - day trading volume in history, second only to the selling spree triggered by tariff policies in April 2025. Put options give investors the right to sell stocks at a preset price, and their value increases as the price of the underlying stock falls. Therefore, they are often used by investors who bet on a decline in stock prices.

Data from the Chicago Board Options Exchange (Cboe) showed that the trading volume of options linked to the S&P 500 index reached a record 7.8 million contracts last Friday. Approximately 64% of them were zero - day - to - expiration options, so - called 0dte contracts, which allow investors to bet on whether the stock index will rise or fall at the close of the day.

The rotation of US stock sectors started last Friday, with funds fleeing from technology stocks and flowing into defensive sectors. The US employment data on that day was strong. The Nasdaq index recorded its largest single - day decline since April 10, 2025, and the S&P 500 index also tumbled 2.6%. The utility, consumer staples, and real estate sectors bucked the trend and rose.

The Wall Street Journal reported on the 9th, quoting Joshua Schachter, chief investment officer of Easterly Snow, as saying: "The trading of many chip stocks is only driven by sentiment and market momentum, without considering valuation at all. There are many other investment opportunities elsewhere."

The report said that since airlines, freight, and railway companies play a crucial role in transporting goods and raw materials that support economic development, the stocks of these companies are usually regarded as market barometers. The Dow Jones Transportation Average, which tracks the 20 largest transportation companies, has risen for five consecutive trading days, with a cumulative increase of 29% in 2026.

In addition, according to FactSet data, as of last Friday, the profits of companies in the materials industry increased by approximately 42%, while the profits of the non - consumer staples and financial industries increased by 41% and 22% respectively. Analysts surveyed by FactSet expect corporate profits to increase by 22% in the second quarter. They expect the full - year profits to increase by 23%.

Some investors are turning their attention overseas, where stock prices are cheaper and seem less vulnerable to the collapse of the US artificial intelligence trading.

The views in this article are for reference only and do not constitute investment advice. Investment involves risks, and you should be cautious when entering the market.

This article is from the WeChat official account “China News Service - New Economy” (ID: jwview), written by Luo Kun and published by 36Kr with authorization.