BANGKOK – Global equity markets ended a volatile trading session with mixed results on Friday, one day after the Dow Jones Industrial Average notched a fresh all-time high, as divergent performance across artificial intelligence-linked stocks kept indexes across the world split between gains and losses.
U.S. markets will remain closed Friday in observance of the Independence Day public holiday. Ahead of the long weekend, S&P 500 futures edged 0.3% higher, while Dow futures slipped 0.2% heading into the holiday break.
In European afternoon trading, benchmark indexes delivered uneven results: Germany’s DAX gained 0.4% to close at 25,667.73, while France’s CAC 40 slipped a modest 0.1% to 8,471.19. The UK’s FTSE 100 declined 0.4% to settle at 10,613.55.
Across Asian markets, most indexes rebounded after two straight days of tech-driven selloffs. South Korea’s Kospi staged a dramatic 5.8% recovery to 8,088.34, just one day after plummeting nearly 8% in a broad tech selloff. Samsung Electronics, the nation’s largest listed company and a leading global memory chip manufacturer, jumped 8.2%, while smaller rival SK Hynix surged 10.9% as investors bought the dip following the previous session’s sharp losses.
Japan’s Nikkei 225 also advanced, climbing 1.5% to 69,744.07. Leading chip equipment manufacturer Tokyo Electron gained 0.4%, while memory chip producer Kioxia jumped 9.2% on the day. Hong Kong’s Hang Seng index added 1.3% to reach 23,350.03, and China’s Shanghai Composite gained a modest 0.4% to close at 4,043.64. Taiwan’s Taiex edged up 0.1%, India’s Sensex rose 0.4%, and Australia’s S&P/ASX 200 gained 1.4% to finish at 8,844.40.
“Asian stocks found some footing after two bruising tech-led sessions, with the Korean market once again showing how quickly a stretched rubber band can snap back when everyone leans the same way,” Stephen Innes, managing director at SPI Asset Management, noted in a market commentary Friday.
The mixed global performance follows a divergent trading session on Wall Street Thursday, when the Dow Jones Industrial Average climbed 1.1% to a new record closing high of 52,900.07, with seven out of 10 stocks across the S&P 500 registering gains. Even with broad upward momentum across most sectors, the S&P 500 finished little changed, edging up less than 0.1% to close at 7,483.24, while the Nasdaq composite dropped 0.8% to 25,382.67, dragged down by steep losses across high-flying AI and chip stocks.
Market momentum received a partial boost from a new U.S. jobs report showing employers added 57,000 new positions in June. While the hiring gain indicates ongoing resilience in the world’s largest economy, the total fell short of economists’ consensus forecast of 100,000 new jobs and marked a slowdown from May’s faster hiring pace.
The weaker-than-expected hiring data has reduced expectations that the Federal Reserve will need to implement multiple interest rate hikes through 2024 to cool persistent inflation. Inflation pressures have already eased slightly as oil prices have pulled back below levels seen during the height of geopolitical tensions linked to the Iran war, which earlier drove crude prices higher. Lower rates are broadly positive for equities, as they cut borrowing costs for households and businesses and support higher valuations for stocks and other financial assets.
Beyond chip stocks, crypto-linked equities rallied after Bitcoin pulled back from near its 2024 low on Thursday to post roughly 2% gains that day, with another 0.9% increase early Friday. Trading platform Robinhood Markets gained 3.8%, and crypto exchange operator Coinbase Global added 3.9% for the session.
The recent selloff in major chip stocks stems from growing investor concerns that valuations for AI-linked semiconductor companies have grown overstretched during the multi-month AI boom. Investors have begun questioning whether massive current spending on new chip production and AI data centers will deliver the level of profit and productivity growth that market bulls have projected. On Thursday, leading U.S. chip stocks extended losses: Micron Technology erased early gains to close 5.5% lower, a day after a 10.6% plunge. AI chip leader Nvidia fell 1.4%, and semiconductor equipment maker Lam Research sank 10.2%. Because Nvidia has a market capitalization of nearly $4.7 trillion, its price movements carry more weight on the S&P 500 than any other single stock, amplifying the impact of its declines on the broader index.
In commodity trading early Friday, Brent crude, the global benchmark for oil, slipped less than 0.1% to $71.76 per barrel, while U.S. West Texas Intermediate crude fell 0.2% to $68.48 per barrel. In currency markets, the U.S. dollar inched up to 161.14 Japanese yen from 161.11 yen in the prior session, while the euro appreciated slightly to $1.1451 from $1.1431.