- Bitcoin fell below $63,000 as tech stocks led a wider risk-off move across markets.
- Chip losses, Fed-rate fears and AI spending concerns pressured growth stocks on Tuesday.
- JPMorgan warned fund rebalancing could add $165 billion in equity selling by June-end.
Bitcoin fell with technology stocks on Tuesday as investors moved away from risk assets across the stock market. The S&P 500 and Nasdaq dropped to more than one-week lows, while chip stocks led the broader pullback.
The pressure spread from stocks into crypto during the U.S. session. Bitcoin slipped below $63,000 as traders reacted to weakness in high-growth technology shares and a wider decline in risk sentiment.
However, Reuters reported that the Philadelphia Semiconductor Index fell 7.6%, while the S&P 500 technology sector lost 3.2%. Nvidia, Micron and SanDisk were among the stocks under pressure.
Stocks Slide as Fed, AI and Fund-Flow Risks Grow
Market commentary also pointed to the scale of the move. Bull Theory said in an X post that more than $1.4 trillion had been wiped out from the U.S. stock market as the S&P 500 dropped 1.5%.
In a separate X post, market commentator Amit said Tuesday brought several major developments for the stock market. The recap pointed to positioning risk, AI infrastructure deals and rate expectations. It also covered corporate moves across technology, energy and defense.
Nasdaq 100 lost more than $1 trillion in market value during the tech-led selloff. That supported the view that pressure was concentrated in large technology and AI-linked stocks.
The decline came as investors weighed a more hawkish Federal Reserve outlook and growing concern over debt-funded AI spending. Those two issues hit growth stocks at the same time as traders reduced exposure to risk assets.
However, rate expectations added to the pressure. Reuters reported that Bank of America now expects the Federal Reserve to raise rates by 25 basis points in September, October and December.
BofA’s view marked a shift from its earlier forecast for no rate changes. The firm also pushed its expected timing for the first Fed rate cuts to 2028.
Higher rates could weigh on stocks because they raise borrowing costs. They could also reduce the value investors place on future earnings, which matters most for growth and technology companies.
Chip stocks reflected that concern. Investors assessed whether the AI buildout could keep expanding at the same pace if financing costs rise.
Fund Flows and AI Deals Add Market Pressure
Quarter-end positioning added another risk. JPMorgan estimated that institutional investors could sell up to $165 billion of equities and move a similar amount into bonds before the end of June. The projected rebalance could become one of the largest in recent years.
The expected sellers include Japan’s Government Pension Investment Fund, Norway’s Norges Bank, U.S. defined benefit pension plans and the Swiss National Bank. Balanced mutual funds may offset part of the pressure with equity buying.
AI infrastructure remained central to the market story. SpaceX signed a agreement with Reflection AI, giving the startup access to Nvidia GB300 chips at the Colossus 2 data center.
Reflection AI is expected to pay SpaceX about $150 million per month starting July 1, 2026. According to Reuters, the agreement is set to run through 2029. The deal showed the scale of demand for AI computing power. It also highlighted why investors are focused on data center costs, chip supply and long-term AI spending.
Nvidia remained central to the AI theme. The company announced Halos for Robotics, a full-stack safety system for robotics and physical AI.
The system is aimed at industrial robots, humanoids and autonomous mobile robots. Nvidia said Agility would be the first company to use parts of Halos in its humanoid safety system.
However, Micron also expanded its AI role through a strategic agreement with Anthropic. The deal covers memory, storage, supply and infrastructure work for AI systems.
Micron said it would supply data center memory and storage products. These include high-bandwidth memory, DRAM and solid-state drives.
The companies plan to work on performance and energy efficiency for AI workloads. The deal also includes Micron’s investment in Anthropic’s Series H funding round.
However, Reuters reported that the company is in advanced talks to buy AI chip startup Modular in a deal that could value the firm at about $4 billion. No final agreement has been announced. If completed, the deal would help Qualcomm expand further into AI and data center processors.
AI Expansion Reaches Media, Defense, Quantum and Energy
Google also moved deeper into AI media tools. Google DeepMind reached a multi-year partnership with A24 to develop AI tools for film production. The deal includes an investment of about $75 million in A24.
However, Defense technology added another market headline. Palantir said it secured a foundational role in the U.S. Army’s Next Generation Command and Control data layer.
The baseline for the data layer for the program has been established by the Army. Cloud Data Layer is supplied by Palantir Foundry and Tactical Data Layer is supplied by Anduril Lattice.
However, President Donald Trump signed two executive orders focused on quantum computing and post-quantum cryptography. One order targets the development of a powerful U.S. quantum computer. The other directs federal agencies to prepare systems for future cybersecurity risks tied to quantum technology.
Power demand from artificial intelligence was still in the market narrative as well. Chevron entered into a 20-year contract with Microsoft to provide natural gas-powered electricity for a data center planned for West Texas.
The facility, named Kilby, is set to generate its first electricity in 2028 and could potentially supply up to 2.67 gigawatts of electricity. Chevron would be using Permian Basin natural gas and GE Vernova turbines for the facility.
Together, the developments showed why investors turned cautious. Stocks faced pressure from rate expectations, chip weakness, AI spending concerns, quarter-end flows and heavy exposure to growth trades.
Bitcoin’s drop added another signal. Crypto weakened with stocks because investors were reducing exposure across risk assets, not just selling one part of the market.
Related: Bitcoin Crashes Below $63K: What Sparked Today’s Crypto Market Sell-Off?
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