In a day marked by declining global stock markets, technology shares continued their downward trend on Thursday, influenced by renewed tensions between the United States and Iran. Investor sentiment remained cautious as oil prices hovered near one-month highs, reflecting ongoing concerns about Middle East stability. Asian and European markets struggled to maintain the gains seen on Wall Street the previous day, with South Korea’s Kospi index experiencing a significant drop of more than 6%. This decline was largely driven by SK hynix, which fell over 11% amid investor apprehension regarding the sustainability of the recent AI-driven rally in semiconductor stocks.
The market’s skepticism over high valuations in the tech sector highlights growing doubts about whether the substantial investments in artificial intelligence can be justified. This has prompted a more general retreat in memory-chip and semiconductor stocks. Despite these challenges, Taiwanese semiconductor heavyweight TSMC reported an impressive quarterly performance, with net income jumping over 77% in the second quarter, fueled by strong AI hardware demand. The company also revealed plans to augment its investment in Arizona-based manufacturing facilities by an additional $100 billion.
In contrast to the broader market downturn, Hong Kong’s stock exchange saw a rise of over 1%, boosted by gains in Chinese semiconductor companies. Meanwhile, in the United States, major stock indexes finished Wednesday’s session on a positive note, buoyed by advances in leading technology firms. Investor confidence was further bolstered by a 0.3% drop in US producer prices for June, driven by reduced energy costs and speculation that the Federal Reserve might hold off on hiking interest rates in the near future.
Despite these positive developments, analysts cautioned that increasing tensions between Washington and Tehran could inject further volatility into the markets. On the corporate front, significant news emerged from Europe as German food-delivery company Delivery Hero agreed to a takeover by ride-hailing giant Uber. The deal, valued at €12.7 billion ($14.6 billion), sent Delivery Hero shares climbing in Frankfurt trading, underscoring the ongoing consolidation trends within the tech-driven service sectors.