AI frenzy jolts global tech stocks, chips plunge after Micron and Apple moves | Ukraine news
Markets swung wildly this week as AI-driven rallies met steep profit-taking, leaving investors questioning whether a deeper correction is imminent.
June 26 – From the Editor
Global tech assets drew investor attention this week, but given the substantial rise of many companies in the artificial intelligence sector, such volatility is quite expected ahead of the quarter’s end.
Early in the week, global markets were under pressure: major US indices fell due to weakness in large tech companies. Some attributed it to AI spending expectations, but by the next day the sell-off spread to chip stocks – among the main players in the AI field. For example, the KOSPI index in Korea fell by almost 10%, and the SOX semiconductor index by about 8%.
After Micron Technology released quarterly results, the situation initially calmed. However, a wave of selling again increased pressure on the market after Apple announced price increases for iPad and MacBook due to higher memory and storage costs. The company’s shares fell by more than 6% in after-hours trading, exacerbating selloffs in Asian markets.
In the context of this week, the question arose: has AI enthusiasm become excessive and is the market due for a deeper correction. In this discussion, the words of the late chairman of the Federal Reserve, Alan Greenspan, who died this week at the age of 100, are often cited.
In response to such thinking, many analysts express different positions. For example, Masayoshi Son of SoftBank called discussions about the AI bubble offensive to artificial intelligence, while some banks raise forecasts for the end of the year for the S&P 500, pointing to the potential for further market growth.
Will the Fed be able to keep the market from overheating if the AI mania continues to lift asset prices? Probably not directly. The new Fed chair Kevin Warsh apparently does not seek to inflame the policy debate or reduce transparency – such a course could increase volatility in the markets.
Interim market signals also show divergences between rate expectations among leading financial institutions: large gaps between forecasts indicate that the path of monetary policy remains uncertain and could cause additional currency fluctuations.
Britain: Policy and Changes at the Top
In the United Kingdom the week was focused on political events: Prime Minister Keir Starmer announced his resignation after months of pressure, and the return to Parliament of the key opposition figure Andy Burnham. The market reacted calmly, but investors’ attention is focused on who will become the new leader and who will be appointed finance minister.
Changes at the head of the government do not solve the country’s main problems – slow productivity growth and high social spending. If the new leader cannot implement the necessary reforms, the constant “rotation” of the government may only increase uncertainty and affect the investment climate.
Energy and Oil Prices
One of the main tasks for the future government is energy policy, especially in light of recent events and the needs of domestic reserves. Considering the policy on extraction and drilling in the North Sea could significantly influence the country’s position in the energy sector.
A hot wave is also affecting Europe’s energy infrastructure. Oil shows a trend of decline and a return to pre-war levels, while volumes through key routes are rising – which heightens expectations for the normalization of global energy flows. At the same time attention continues to be paid to regulators’ actions regarding currency policy and their impact on the market.
The dollar remained strong against major currencies, but the yen persisted in weakness, and the lack of clear signals from Japanese financial authorities prompted caution about possible interventions. The coming week is typically shortened due to holidays in the United States, but publications of June employment data and other economic indicators are expected to help market participants determine the direction of further developments.
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