Global Markets Hit by Chipmaker Selloff Amid Rising Geopolitical Tensions

A global market selloff driven by declining chipmaker stocks has resulted in losses across Asia, Europe, and the U.S. The downturn stems from concerns about the longevity of AI-driven rallies, heightened by geopolitical tensions and rising oil prices. European markets fared slightly better due to lesser tech exposure.

Global stock markets experienced a significant downturn on Friday as investors reevaluated the sustainability of the artificial-intelligence-driven rally, leading to losses for chipmaker stocks. This market turbulence was further compounded by escalating military tensions in the Middle East, contributing to increased oil prices and concerns about inflation and economic growth.

European markets suffered with the STOXX 600 falling by 0.5%, and major indices in Paris, Frankfurt, and London also declined. In the U.S., Nasdaq futures fell 1.7%, while S&P 500 futures decreased by 0.8%. The Asian markets faced even sharper declines, notably with Taiwan experiencing a dramatic 6% drop, marking its worst performance since U.S.-imposed tariffs during President Trump's tenure.

Oil prices surged in parallel with market volatility, driven by renewed Iranian attacks on U.S. facilities in the Gulf, and U.S. and Brent crude futures showing substantial weekly gains. Meanwhile, expectations for Federal Reserve rate hikes were tempered by recent U.S. inflation data, providing some stability to the U.S. dollar despite pressures on other global currencies.