As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Global markets weakened on Thursday as another semiconductor selloff outweighed strong earnings from TSMC. South Korea’s KOSPI fell around 6 percent after the Bank of Korea raised rates and regulators moved against single-stock leveraged ETFs tied to major chipmakers. Oil remained above $85 as renewed U.S.-Iran hostilities kept inflation risk alive, while benign U.S. inflation data helped limit the rise in Treasury yields.
In Asian Equity Markets stocks fell as the pressure on semiconductor-heavy markets intensified. South Korea’s KOSPI dropped around 6 percent, taking the index deeper into its July correction after a powerful first-half rally. The decline came despite strong results from TSMC, which showed that underlying AI chip demand remains resilient. Investors focused instead on crowded positioning, leveraged retail products and the risk that exceptional earnings may no longer be enough to support valuations. Japan’s Nikkei fell around 3 percent as technology weakness and the yen’s continued fragility weighed on sentiment.
In European Equity Markets stocks edged lower as investors absorbed the Asian chip selloff and the renewed rise in oil. The STOXX 600 moved down in early trading, while Wall Street futures also softened. ASML offered some support after raising its 2026 revenue forecast and pledging to expand capacity, but the wider market was less constructive. Utilities, telecoms and other rate-sensitive sectors weakened as higher energy prices kept pressure on European inflation expectations and bond yields.
In U.S. Equity Markets futures slipped after a stronger Wall Street session on Wednesday. Softer U.S. CPI and PPI data had helped reduce expectations for a July Fed hike, while strong bank earnings supported the broader index. That relief was tested again on Thursday as the semiconductor correction spread through global markets and investors awaited U.S. retail sales, jobless claims, Netflix, GE Aerospace and further bank earnings. SpaceX also remained under scrutiny after falling back below its IPO price, adding another sign that investor tolerance for expensive growth stories has become less generous.
In Commodities Markets oil remained firm as the conflict between the United States and Iran continued to support the geopolitical premium. Brent traded just above $85 per barrel and was up roughly 11 percent for the week so far. The latest U.S. strikes on Iran and Tehran’s attacks on U.S. bases in Kuwait and Jordan kept the market focused on supply risk through the Gulf. The oil move is now large enough to challenge the recent improvement in inflation expectations, particularly for energy-importing economies.
In Currency Markets the dollar was broadly steady, helped by defensive demand but capped by softer U.S. inflation data. The dollar index traded near 100.52 after falling on Wednesday, while the yen remained under pressure around 162.16 per dollar. The yen’s weakness leaves Japanese intervention risk in place, especially with oil above $85 raising imported-energy costs. Sterling slipped from recent highs after UK GDP showed only minimal growth in May, underlining the difficulty of tighter policy in a fragile economy.
In Bond Markets Treasury yields edged higher but remained contained relative to the oil move. The U.S. 2-year yield traded around 4.16 percent, while the 10-year yield moved toward 4.59 percent. Futures pricing showed the probability of a July Fed hike falling to around 10 percent after the softer inflation data. Europe looked less comfortable. Germany’s 10-year Bund yield rose to around 3.13 percent, its highest level since late May, as investors worried that higher energy prices could force the European Central Bank to keep policy tighter for longer.
The Cross-Asset Read
Thursday showed the market’s problem with the AI trade is no longer just about whether demand is strong.
TSMC’s numbers were strong. ASML’s guidance was stronger than expected. Both pointed to continued investment in advanced chips, data centres and AI infrastructure.
The market still sold South Korea.
That reaction matters because the weakest link is shifting from demand to positioning and policy. The Bank of Korea has raised rates to stabilise the won and contain inflation. Regulators are restricting new single-stock leveraged ETFs because those products have amplified volatility in Samsung and SK Hynix. Higher oil is adding another layer by making the inflation backdrop less forgiving.
The immediate flag is Brent at $85 and the U.S. 10-year yield at 4.60 percent. If Brent holds above $85 while the 10-year breaks above 4.60 percent, the pressure on long-duration growth and semiconductor valuations is likely to broaden. If yields stay contained despite high oil, earnings can still help stabilise the market.
The AI investment cycle remains real.
The market is now asking whether the trade can absorb higher energy prices, tighter local policy and less leverage at the same time.
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