On Thursday, global stock markets experienced a downturn as technology shares continued their decline, influenced by mounting tensions between the United States and Iran. This uneasy geopolitical climate contributed to investor unease, while oil prices hovered near their highest point in a month, reflecting ongoing concerns about the stability of the Middle East region.
Despite the previous day’s positive performance on Wall Street, Asian and European markets struggled to maintain upward momentum. South Korea’s Kospi index saw a significant drop of over 6%, primarily due to a substantial fall in SK hynix shares by more than 11%. This decline was fueled by investor apprehension that the semiconductor sector’s surge, driven by artificial intelligence, might be losing steam. The broader concern about whether hefty investments in AI can justify the lofty valuations of tech companies has led to a broader retreat in the memory-chip and semiconductor markets.
Amidst the market volatility, Taiwan Semiconductor Manufacturing Company (TSMC) reported impressive financial results, posting a record-breaking quarterly profit. The company’s net income soared by over 77% in the second quarter, bolstered by strong demand for AI-related hardware. TSMC also revealed plans to invest an additional $100 billion in its manufacturing operations in Arizona, underscoring its commitment to expansion despite market uncertainty.
Contrary to the general market trend, Hong Kong’s stock exchange saw gains, with its index rising more than 1% on the back of advances by Chinese semiconductor firms. In the U.S., major indices concluded Wednesday’s trading session on a positive note, buoyed by the robust performance of technology giants. Investor sentiment was further uplifted by a 0.3% decline in U.S. producer prices in June, driven by reduced energy costs and the hopeful prospect that the Federal Reserve might refrain from imminent interest rate hikes. However, analysts cautioned that the escalating conflict between Washington and Tehran could introduce additional market volatility.
In the corporate arena, significant movements were observed as German food-delivery company Delivery Hero agreed to a merger with ride-hailing behemoth Uber. The deal, valued at €12.7 billion ($14.6 billion), led to an increase in Delivery Hero’s share price during Frankfurt trading, highlighting the dynamic shifts within the global corporate landscape.