All three major U.S. stock indices closed lower.

In particular, the Nasdaq fell by more than 2%, while the S&P 500 recorded a decline of over 1%.

By sector, technology stocks led the downturn, plunging nearly 4%, while the materials sector also weighed on investor sentiment, sliding nearly 3%.

The market reacted sensitively today to concerns over an overheated AI rally and the burden of high valuations.

As progress in Middle East negotiations raised the possibility of restored oil supplies through the Strait of Hormuz, West Texas Intermediate (WTI) crude oil fell 0.88% to $73.21 per barrel, dropping to levels seen at the beginning of the conflict.

Despite this easing of geopolitical tensions, the possibility of additional interest rate hikes by the Federal Reserve, combined with the ripple effect of a sharp decline in major domestic semiconductor stocks, led to a wave of profit-taking in tech-heavy shares.

In particular, concerns were heightened by the fact that big tech companies are taking on significant debt to fund AI data centers and facility investments.

Among individual stocks, Micron Technology, which is set to announce its earnings, plummeted over 13% due to valuation concerns following its recent steep rise, while Nvidia and AMD also saw sharp declines.

Consequently, the Philadelphia Semiconductor Index plunged more than 7%, marking its largest correction since last year.

Micron's earnings report, which will be released early tomorrow morning Korea Standard Time, is expected to be a key variable in proving the robustness of demand for AI infrastructure.