Global stock markets faced a downturn on Thursday, primarily driven by continued losses in technology shares and heightened tensions between the United States and Iran, which weighed heavily on investor sentiment. At the same time, oil prices hovered near their highest levels in a month, reflecting concerns about the stability in the Middle East.
Despite the previous day’s gains on Wall Street, Asian and European markets struggled to maintain momentum. South Korea’s Kospi index took a significant hit, dropping over 6%, heavily impacted by a more than 11% decline in SK hynix shares. Investors grew wary that the surge in semiconductor stocks fueled by artificial intelligence might be losing steam. Questions have been raised about whether the substantial investments in the AI sector can support the lofty valuations seen in many tech firms, prompting a broader retreat in memory-chip and semiconductor stocks.
Amid the sell-off, Taiwan Semiconductor Manufacturing Company (TSMC) bucked the trend with remarkable financial performance, reporting a record quarterly profit. The chip giant’s net income soared over 77% in the second quarter, driven by robust demand for AI hardware. Reinforcing its growth strategy, TSMC announced plans to invest an additional $100 billion in expanding its manufacturing capabilities in Arizona.
In contrast, Hong Kong’s stock market defied the downward trend, climbing more than 1% as Chinese semiconductor companies posted advances. Meanwhile, in the United States, major indexes experienced gains on Wednesday, bolstered by the performance of technology giants. Investor optimism was further supported by a 0.3% drop in US producer prices in June, attributed to lower energy costs. This development has fueled expectations that the Federal Reserve might refrain from raising interest rates in the short term. Nonetheless, analysts cautioned that the rising hostilities between Washington and Tehran could potentially escalate market volatility.
In corporate news, Germany’s food-delivery company Delivery Hero saw its shares rise in Frankfurt trading after agreeing to a takeover by ride-hailing giant Uber. The acquisition deal is valued at €12.7 billion ($14.6 billion), marking a significant development in the industry.