Global Markets Mixed as Tech Giants Face Sell-Off; Oil Prices Steady
Asian and European shares saw varied movements, with South Korea's Kospi significantly impacted by a decline in major technology companies.
Global stock markets experienced mixed trading Thursday, with South Korea's Kospi index dropping over 4% following a significant downturn in major technology companies, including memory chipmaker SK Hynix. The declines echoed a broader trend seen in some Big Tech giants on Wall Street.
Oil prices remained relatively stable, with Brent crude trading near $79 a barrel. Market sentiment is partly influenced by ongoing uncertainty surrounding the conflict between the U.S. and Iran, despite hopes for the reopening of the Strait of Hormuz.
Futures for the S&P 500 were up 0.1%, and the Dow Jones Industrial Average gained 0.3%. Investors are anticipating Friday's monthly U.S. employment report for July, with analysts suggesting markets are preparing for its potential impact. Stephen Innes of SPI Asset Management noted that the sell-off in Asian chip stocks appeared to be a combination of profit-taking and risk reduction ahead of the U.S. jobs data.
While strong corporate profits and growth expectations have generally supported U.S. stocks, Asian benchmarks have been affected by selling pressure on companies linked to the artificial intelligence boom. SK Hynix shares plummeted 10.4%, and its larger competitor Samsung Electronics lost 6.3%.
The Kospi closed down 4.6% at 6,296.38. In early European trading, Germany's DAX rose 0.3%, the CAC 40 in Paris increased 0.7%, and Britain's FTSE 100 added 0.3%. Japan's Nikkei 225, however, declined 0.9%. Hong Kong's Hang Seng fell 1.5%, while the Shanghai Composite index climbed 0.6%. Australia's S&P/ASX 200 gained 0.5%.
U.S. President Donald Trump indicated that a deal to reopen the Strait of Hormuz was imminent, though the five-month conflict has previously disrupted oil supplies and rattled energy markets. Brent crude prices edged up less than 0.1% to $79.50 a barrel, after experiencing significant fluctuations that affected inflation and shipping costs.
On Wednesday, the S&P 500 had slipped 0.2% from a record high, while the Dow industrials rose 0.5%, and the Nasdaq composite lost 0.8%. Major technology firms saw declines, with Alphabet, Google's parent company, falling 4%, and Microsoft down 1.1%. The Walt Disney Co. rose 3.6% after reporting strong earnings, boosted by film revenue and theme park results.
Elon Musk's SpaceX saw its stock fall 13.6% after its first quarterly report as a public company revealed increased spending on artificial intelligence. The company's announcement that it would exclusively use Nvidia chips for its AI technology provided a 3.4% boost to Nvidia shares.
Inflation concerns and their impact on the economy continue to be a focus for markets and the Federal Reserve, which has maintained its benchmark interest rate steady.
In currency markets, the dollar rose to 157.85 Japanese yen from 157.77 yen, and the euro fell to $1.1545 from $1.1555.