Tech stocks dive as Friday’s incoming SpaceX IPO creates ‘bad psychology’

June 10, 2026 - 13:42

Technology shares took a sharp hit on Tuesday, deepening a selloff that started in early June. Investors are growing jittery ahead of SpaceX's highly anticipated initial public offering later this week, a move that some analysts say is creating a "bad psychology" across the sector.

The downturn has been most severe in high-flying AI stocks, where traders are pulling back from crowded trades. The SpaceX IPO, long seen as a landmark event, is drawing massive attention and capital away from other tech names. Market participants worry that the launch could siphon liquidity from the broader tech ecosystem, especially as valuations remain stretched.

"The excitement around SpaceX is real, but it's also distorting the market," said one portfolio manager. "When a single event dominates the narrative, it creates a vacuum. Everything else gets sold to raise cash for the big debut."

The broader Nasdaq composite fell more than 2% on Tuesday, with semiconductor and software stocks leading the decline. Nvidia, AMD, and Microsoft all posted losses. The selling pressure has been building for weeks, but the pace accelerated as the IPO date approached.

Some analysts argue the selloff is overdue. The AI rally had pushed many stocks to unsustainable levels, and the SpaceX IPO is serving as a convenient excuse to take profits. Others warn that the psychological impact could linger, especially if the offering prices higher than expected and triggers a wave of retail speculation.

For now, the market is bracing for a volatile few days. Whether the SpaceX IPO becomes a catalyst for a broader correction or just a temporary distraction remains to be seen. But the "bad psychology" is real, and it is rattling confidence in tech's near-term outlook.