Global stock markets experienced a downturn on Thursday as losses in technology shares deepened, compounded by renewed tensions between the United States and Iran that dampened investor sentiment. Oil prices hovered around their highest levels in a month, fueled by concerns over Middle Eastern stability.
Despite previous gains on Wall Street, both Asian and European markets struggled. South Korea’s Kospi index saw a significant decline of over 6%, with major chipmaker SK hynix plummeting by more than 11%. This drop was attributed to investor apprehensions that the surge in semiconductor stocks driven by artificial intelligence may be losing steam. The broader market has grown wary of the hefty investments into AI, scrutinizing whether these can justify the high valuations of numerous tech firms, leading to a pullback in memory-chip and semiconductor stocks.
Amidst the sell-off, Taiwanese semiconductor leader TSMC reported a remarkable achievement, posting a record quarterly profit with net income climbing over 77% in the second quarter, driven by robust demand for AI hardware. Additionally, TSMC unveiled plans to inject another $100 billion into its manufacturing operations in Arizona, highlighting its confidence in future growth.
While most markets grappled with declines, Hong Kong’s stock market defied the trend, rising by over 1%, buoyed by advancements in Chinese semiconductor companies. In contrast, U.S. markets closed higher on Wednesday, bolstered by gains in major technology firms. Investor confidence was further supported by a 0.3% decrease in U.S. producer prices in June, attributed to lower energy costs and the anticipation that the Federal Reserve might hold off on hiking interest rates in the near future. Nonetheless, analysts cautioned that escalating tensions between Washington and Tehran could introduce more volatility to the markets.
In corporate developments, German food-delivery company Delivery Hero saw its shares rise in Frankfurt trading following the announcement of its acquisition by ride-hailing giant Uber. The deal, valued at €12.7 billion ($14.6 billion), marks a significant consolidation in the food delivery and transportation sectors.