Global stock markets took a downturn on Thursday, led by declines in technology shares and compounded by renewed tensions between the United States and Iran. Meanwhile, oil prices hovered near one-month highs, reflecting worries about stability in the Middle East. Markets in Asia and Europe struggled to build on the gains seen in the U.S. a day prior. In particular, South Korea’s Kospi index dropped over 6%, driven down by a more than 11% fall in chipmaker SK hynix as investors questioned the sustainability of the artificial intelligence-driven rally in semiconductor stocks.
These declines underscore growing skepticism about whether the substantial investments in the AI sector can support the lofty valuations of many tech firms. Concerns over these elevated prices have prompted a broader retreat from memory-chip and semiconductor stocks. Despite this, Taiwanese chip leader TSMC reported a record quarterly profit, with net income soaring over 77% in the second quarter thanks to robust demand for AI hardware. The company also revealed plans to invest an additional $100 billion in manufacturing facilities in Arizona, signaling its confidence in the sector’s long-term potential.
In contrast to the broader market trend, Hong Kong’s stock market rose over 1%, buoyed by advances in Chinese semiconductor companies. In the United States, major indexes closed higher on Wednesday, bolstered by gains in major technology firms. Investor confidence was further supported by a 0.3% drop in U.S. producer prices for June, influenced by lower energy costs, which fueled expectations that the Federal Reserve might hold off on raising interest rates in the near term. However, analysts cautioned that the deteriorating relations between Washington and Tehran could lead to increased market volatility.
In corporate developments, German food-delivery company Delivery Hero saw its shares rise in Frankfurt trading following news of its acquisition by ride-hailing giant Uber. The deal, valued at €12.7 billion ($14.6 billion), marks a significant expansion for Uber into the food delivery sector, further diversifying its business portfolio.