Global stock markets experienced a downturn on Thursday, primarily driven by continued losses in technology shares and heightened tensions between the United States and Iran that dampened investor sentiment. Despite this, oil prices hovered near their highest levels in a month due to ongoing concerns about stability in the Middle East.
While Wall Street had seen gains earlier, Asian and European markets struggled to maintain that momentum. South Korea’s Kospi index notably dropped more than 6%, with shares of chipmaker SK hynix plummeting over 11%. This decline was fueled by growing apprehension that the recent rally in semiconductor stocks, sparked by enthusiasm for artificial intelligence, might be losing steam. The inflated valuations of many tech companies have prompted investors to reconsider the substantial investments being funneled into the AI sector, leading to a broader sell-off in memory-chip and semiconductor stocks.
Despite these challenges, Taiwan Semiconductor Manufacturing Company (TSMC) reported a record profit for the quarter, with net income soaring over 77% in the second quarter, thanks to robust demand for AI hardware. In response, TSMC announced plans to invest an additional $100 billion in its manufacturing facilities in Arizona, underscoring its commitment to expanding its production capabilities.
In contrast, Hong Kong’s stock market defied the overall downward trend, rising over 1% as Chinese semiconductor companies made gains. Meanwhile, in the United States, major indexes closed higher on Wednesday, buoyed by tech giants. Investor confidence was further bolstered by a 0.3% drop in US producer prices in June, attributed to lower energy costs and the possibility that the Federal Reserve might hold off on hiking interest rates in the near term. Nevertheless, analysts cautioned that increasing hostilities between Washington and Tehran could introduce further volatility to the markets.
On the corporate front, significant acquisition news emerged as German food-delivery company Delivery Hero agreed to a takeover by ride-hailing giant Uber in a transaction valued at €12.7 billion ($14.6 billion), resulting in a boost for Delivery Hero’s shares in Frankfurt trading.