Key Moments
- Semiconductor-led selling dragged Asian markets sharply lower, with Taiwan’s stock market plunging more than 6% and Japan’s Nikkei falling 4%.
- Oil prices climbed again, putting Brent at $84.75 and U.S. crude at $79.8 per barrel, with both benchmarks on track for weekly gains of more than 11%.
- The dollar held broadly steady as investors priced in roughly 26 basis points of additional Federal Reserve hikes by December, while the yen hovered near a 40-year low.
Global Equities Rattled by Semiconductor Selloff
Another steep downturn in semiconductor shares swept across global equity markets on Friday, sparking a rout in Asia and pushing European stock benchmarks lower as investors sharply reappraised the strength and sustainability of the recent artificial-intelligence-focused rally.
Risk appetite was further undermined by renewed military actions in the Middle East, which helped keep energy markets tight and reignited worries about inflation and the broader growth outlook.
Regional Market Performance
In Europe, the STOXX 600 index declined 0.7%, with major markets in Paris and Frankfurt also trading in negative territory, while Britain’s FTSE was little changed.
The damage was more pronounced in Asia. MSCI’s broadest index of Asia-Pacific shares excluding Japan dropped 3%, and Japan’s Nikkei slumped 4%, leaving it 12% below a recent peak.
Taiwan’s equity market absorbed some of the heaviest selling pressure, tumbling more than 6% in its worst session since U.S. President Donald Trump’s “Liberation Day” tariffs. China’s blue-chip index retreated 3.6%.
In Hong Kong, the Hang Seng Index fell 1.8%. The Hang Seng Tech Index slid 4.4%, its steepest decline since April 2025.
Selected Equity Index Moves
| Market / Index | Move | Additional Detail |
|---|---|---|
| STOXX 600 | -0.7% | Europe-wide benchmark |
| FTSE (Britain) | Flat | Little changed on the day |
| MSCI Asia-Pacific ex-Japan | -3% | Broad regional gauge |
| Nikkei (Japan) | -4% | Now 12% below recent peak |
| Taiwan stock market | >-6% | Worst day since Trump’s “Liberation Day” tariffs |
| China blue-chip index | -3.6% | Mainland large caps |
| Hang Seng Index | -1.8% | Hong Kong benchmark |
| Hang Seng Tech Index | -4.4% | Sharpest fall since April 2025 |
Europe’s Sector Mix Offers Partial Shield
Europe’s comparatively smaller exposure to technology hardware helped cushion regional markets from the full impact of the global tech slump. Its heavier weighting toward defensive sectors and consumer staples provided a degree of resilience relative to more tech-focused regions.
“From a European perspective, there’s less exposure towards tech and more exposure to defensives and staples and that is why it looks a little better,” said Lars Skovgaard, investment strategist at Danske Bank.
Chip Leaders Under Pressure Despite Strong Fundamentals
The market downturn in chipmakers unfolded even as key industry players reported upbeat news. Taiwan’s TSMC said its second-quarter profit exceeded expectations by a wide margin, and ASML, the leading global supplier of advanced chipmaking equipment, raised its 2026 sales outlook earlier in the week.
Analysts pointed to positioning and leverage as amplifying forces in the selloff.
“Retail investors have borrowed to trade in this really impressive AI rally, so I think the unwinding of leveraged positions will definitely exaggerate the decline as well. It will feed into the market,” said Fabien Yip, a market analyst at IG.
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