A prolonged selloff for chipmakers continued to ripple through global stock markets on Friday, triggering losses in Asia and Europe and setting up steep falls in the United States as investors abruptly reassessed the durability of the artificial-intelligence-driven rally.
Renewed military strikes in the Middle East were also weighing on risk sentiment, keeping oil prices elevated and reigniting concerns about inflation and growth.
In Europe, the STOXX 600 .STOXX fell 0.5%, with major bourses in Paris .FCHI, Frankfurt .GDAXI and London .FTSE all trading lower.
In the U.S., Nasdaq futures NQc1 slumped 1.7% while S&P 500 futures ESc1 fell 0.8%.
Losses were starker across Asia, with MSCI's broadest index of Asia-Pacific shares excluding Japan .MISX00000PUS down more than 3%, while the Nikkei .N225 tumbled 4%, leaving it down 12% from a recent peak.
Taiwan's stock market .TWII bore the brunt of the selloff, plunging more than 6% for its worst day since U.S. President Donald Trump's "Liberation Day" tariffs, while China's blue-chip index .CSI300 fell 3.6%.
In Hong Kong, the Hang Seng Index .HSI was down 1.8%, and a 4.4% slide in the Hang Seng Tech Index .HSTECH marked its sharpest fall since April 2025.
Europe's relative lack of a technology hardware sector has meant it tends to be more insulated than other markets from a sharp selloff in tech stocks.
"From a European perspective, there's less exposure towards tech and more exposure to defensives and staples and that is why it looks a little better," said Lars Skovgaard, investment strategist at Danske Bank.
The selloff came even as Taiwan's TSMC 2330.TW said second-quarter profit blew past forecasts. And ASML ASML.AS, the world's dominant supplier of equipment needed to make high-tech computer chips, raised its 2026 sales forecasts earlier this week.
"Retail investors have borrowed to trade in this really impressive AI rally, so I think the unwinding of leveraged positions will definitely exaggerate the decline as well. It will feed into the market," said Fabien Yip, a market analyst at IG.
Markets in South Korea were closed on Friday for a holiday, a day after authorities said they would temporarily ban new listings of exchange-traded funds (ETFs) that are tied to certain major technology firms, while raising minimum required deposits for retail investors to invest in such products, in an effort to curb volatility.
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