Things may be looking quieter and calmer in European pre-market but it wasn't really the case in Asia trading, or more specifically Chinese markets. While stocks in Japan and South Korea held up today, it was a different story in China as tech shares there took a heavy beating. The latest selloff is making for some rather ugly viewing, especially when you look at the charts. And considering how nervous investors have been about the AI trade lately, this may be something worth noting just in case it begins to reverberate across the globe.The CSI Semiconductor Industry index tumbled by nearly 6% today, falling to its lowest level since April. Meanwhile, the CSI Artificial Intelligence index fell by almost 4%, threatening to break below its April lows in a drop to its weakest level since November 2025.Both charts tell a similar story. The semiconductor index has now nearly erased its entire rally since April, while the AI index is struggling to hold at the key support region just below 5,000. A firm break below that could invite another wave of selling.And quite frankly, these aren't exactly small corrections anymore.China's STAR50 index, which includes major AI and semiconductor firms, has already lost roughly 40% in less than four months. That's around $480 billion in market value wiped out as investors are caught in the middle of rethinking lofty valuations and the sustainability of AI demand.The question now is, should Wall Street be worried?Given what we are seeing, I think there's a every reason to be more cautious about the current situation. That is especially the case since US tech stocks are also already facing questions over whether the billions in AI infrastructure spending can eventually translate into meaningful profits.Now, the dynamics between China and the US aren't exactly the same of course. Chinese tech firms have their own domestic challenges and also face up against tough export restrictions. That being said, the underlying concern surrounding the AI trade is a rather familiar one. And that is how much are investors willing to pay today for profits that might only materialise years down the road?With big tech earnings coming up this week in Wall Street, we will once again get another test of that. The likes of Microsoft and Alphabet in particular will be heavily scrutinised for clues on AI demand, capital expenditure and profit margins. So, that might end up being the bigger risk for equities and broader risk sentiment than major central bank decisions this week.Having said all that, I must say that China's tech selloff doesn't necessarily mean US stocks are destined to follow. But if big tech earnings fail to reassure investors this week, then the cracks that we are seeing show up in China today could very well start looking a lot more familiar on Wall Street. Just some food for thought. This article was written by Justin Low at investinglive.com.