Global Stocks Mixed as AI Shares Face Sell-Off; Oil Prices Stabilize Amid Tensions
South Korea's Kospi leads declines with a 4.5% drop, while European markets show modest gains and U.S. futures edge higher.
Global shares presented a mixed performance on Monday, with South Korea's Kospi index experiencing a significant drop of 4.5% as investors continued to divest from artificial intelligence-related stocks. U.S. futures indicated a slight upward trend in early trading.
In Europe, Britain's FTSE 100 index fell by 0.4%, while France's CAC 40 and Germany's DAX both saw gains of 0.3%.
Oil prices stabilized after earlier increases, as tensions between the U.S. and Iran escalated with ongoing strikes. Brent crude fell 0.4% to $87.77 per barrel, and U.S. benchmark crude dropped 0.8% to $81.13 per barrel, though both remained elevated compared to pre-conflict levels. The Strait of Hormuz, a vital shipping route for oil, has seen tanker traffic significantly reduced, contributing to supply concerns. U.S. gasoline prices have consequently risen, averaging $4 a gallon.
Markets in Asia showed varied results. Japan's markets were closed for a holiday. South Korea's Kospi index, which had previously benefited from the AI stock surge, closed down 4.5%. Two of its largest companies, Samsung Electronics and memory chipmaker SK Hynix, recorded losses of 4.3% and 4.2% respectively.
Taiwan's Taiex index was down 0.5%. The performance of TSMC, Taiwan Semiconductor Manufacturing Co., climbed 1.3% on Monday, following a Friday decline after the company announced plans to invest an additional $100 billion in expanding its U.S. chipmaking capacity.
Hong Kong's Hang Seng index rose 2.4%, and Shanghai's Composite index traded 0.9% higher. Australia's S&P/ASX 200 saw a marginal decline of less than 0.1%, and India's Sensex slipped 0.6%.
The recent downturn in AI-related stocks, including chipmakers, follows a period of rapid gains that has led to investor concerns about a potential bubble. Many investors have moved to secure profits.
Markets were also influenced by the release of a new powerful AI model, the Kimi K3, by Chinese company Moonshot AI. This development, similar to the impact of China's "DeepSeek moment" in early 2025, highlights the growing challenge posed by capable, lower-cost Chinese AI models to international competitors.
On Friday, the S&P 500 closed down 1%, the Dow Jones Industrial Average fell 0.8%, and the Nasdaq composite lost 1.4%. Major chip stocks such as Nvidia, Broadcom, and AMD also experienced declines.