The Nasdaq Composite is sliding again, with futures pointing to a nearly 2% decline as the tech selloff that’s been building all month shows no signs of letting up. What started as a rough patch for semiconductor stocks has metastasized into a full-blown reassessment of whether investors are paying too much for growth in an environment where interest rates might actually go higher.

Here’s the thing: this isn’t a one-day blip. The Nasdaq dropped 4.1% on June 5, its steepest single-day decline since April 2025, and the selling pressure has only intensified since then. The casualties read like a who’s who of the tech sector, with Intel falling 11%, Oracle dropping 9.5%, and even Nvidia, the poster child of the AI boom, shedding nearly 6% in that session alone.

The rate hike specter returns

Analysts are now pointing to rising odds of Federal Reserve rate hikes later in 2026, a prospect that lands like a cold shower on the tech sector. Remarks from new Fed Chair Kevin Warsh have added fuel to the fire, with markets interpreting his commentary as leaning hawkish.

Higher rates are kryptonite for growth stocks. The math is straightforward: when the risk-free rate goes up, the present value of future earnings goes down. And tech companies, whose valuations are built on earnings projections years into the future, get hit hardest. In English: investors are less willing to pay a premium for promises when they can get decent returns from safer assets like Treasury bonds.

SpaceX and the IPO hangover

Perhaps nothing illustrates the shift in sentiment better than SpaceX. The company’s shares fell for a third consecutive day on June 23, erasing over $600 billion in market value from the gains it had accumulated after its IPO.

Crypto catches the flu

Bitcoin dropped below $63,000 as the broader selloff in risk assets spilled over into digital currencies. The correlation between crypto and tech stocks is on full display during periods of market stress.

Tokens with direct ties to the AI and semiconductor narrative face particular vulnerability. The thesis for many of these projects was built on the assumption that the AI buildout would continue at a breakneck pace with cheap capital.

The smart money is watching two things right now. First, whether the Fed’s rhetoric continues to tilt hawkish in coming weeks, which would cement expectations for rate action and likely extend the selloff in both tech and crypto. Second, whether the selling in marquee names like Nvidia and SpaceX stabilizes or accelerates, because the difference between a healthy correction and something more serious often comes down to whether the biggest names can find a floor.