Global stock markets faced mostly downbeat performances on Thursday as technology stocks continued their downward trend, compounded by renewed tensions between the United States and Iran that dampened investor optimism. The price of oil hovered near a one-month high, reflecting concerns over Middle Eastern stability.
Despite a previous rally on Wall Street, Asian and European markets failed to maintain upward momentum. South Korea’s Kospi index took a significant hit, plunging over 6%. Chipmaker SK hynix saw its shares drop by more than 11%, as skepticism grew over the sustainability of the artificial intelligence-fueled surge in semiconductor stocks. The market has been increasingly wary about whether the substantial investments in AI can justify the lofty valuations of many tech companies, leading to broader declines in memory-chip and semiconductor equities.
In contrast to the general market sentiment, Taiwanese semiconductor leader TSMC announced a record-breaking quarterly profit, reporting a net income increase of over 77% in the second quarter, driven by robust demand for AI hardware. The company also disclosed its intention to invest an additional $100 billion in manufacturing facilities located in Arizona.
Bucking the overall market trend, Hong Kong’s stock market rose by more than 1%, with Chinese semiconductor companies seeing advances. Meanwhile, in the United States, major stock indexes closed higher on Wednesday, buoyed by gains in large technology firms. Investor confidence was further bolstered by a 0.3% decrease in US producer prices in June, attributed to lower energy costs, which raised hopes that the Federal Reserve might hold off on increasing interest rates in the near future. However, analysts cautioned that escalating tensions between Washington and Tehran could lead to increased market volatility.
In corporate developments, German food-delivery company Delivery Hero reached an agreement to be acquired by ride-hailing giant Uber in a deal valued at €12.7 billion ($14.6 billion). This news sent Delivery Hero’s shares higher during Frankfurt trading.