Global equities fell sharply as a semiconductor rout, triggered by Broadcom’s disappointing AI outlook and a stronger-than-expected US jobs report, rippled across markets. Rising bond yields reinforced rate concerns, wiping US$1tn from the chip sector. European and Asia-Pacific equities followed Wall Street lower, with technology stocks leading declines across regions.
Wall Street sinks as chip rout deepens and yields surge
US equities tumbled as a sharp sell-off in semiconductor stocks and rising bond yields weighed heavily on markets following a stronger-than-expected jobs report. The DOW fell -1.3%, the S&P 500 dropped -2.6%, and the NASDAQ plunged -4.2%, marking its worst session since April 2025. Semiconductor stocks led losses after Broadcom’s (-7.9%) weaker-than-expected AI outlook continued to reverberate through the sector, with Marvell losing -16.7%, Micron down -13.3%, Intel off -11.3%, and Nvidia dropping -6.2%, contributing to an estimated US$1tn wipeout across chip stocks and a US$300bn decline in Nvidia’s market value. Investors rotated into defensive sectors, with Procter & Gamble (+4.1%) and Colgate-Palmolive (+4.1%) outperforming. Markets were also pressured by May payrolls data showing the US economy added +172,000 jobs, well above expectations of +88,000, while the unemployment rate held steady at 4.3%. The data reinforced expectations that the Federal Reserve may keep rates higher for longer, with the US two-year yield gaining +10bp to 4.147% and the 10-year yield rising +6bp to 4.532%. Investors continued to monitor stalled US–Iran negotiations, while S&P Dow Jones Indices confirmed it would retain existing eligibility requirements, preventing newly listed companies such as SpaceX from gaining accelerated entry into the major S&P 500 benchmark.
Europe slips as chip sell-off weighs on technology stocks
European equities fell as a global semiconductor sell-off weighed on sentiment. The STOXX 600 fell -0.3%, Germany’s DAX lost -0.7%, France’s CAC 40 declined -0.3%, while the UK’s FTSE 100 edged +0.1% higher. Technology stocks led losses, with Infineon dropping -9.1% and ASML falling -2.4% as investors reacted to the sharp rout in US chipmakers following Broadcom’s disappointing AI outlook. Meanwhile, expectations for an ECB rate hike next week remained firmly intact after Eurozone inflation and growth data held broadly steady.
Asia-Pacific sinks as semiconductor sell-off spreads
Asia-Pacific equities declined as the sell-off in global semiconductor stocks spread across the region following the sharp reversal in the US. South Korea’s KOSPI plunged -5.5%, led by Samsung Electronics (-6.4%) and SK Hynix (-9.9%), while Japan’s Nikkei 225 fell -1.3%. TSMC also declined -6.7%, adding to pressure across the sector. South Korea’s technology industry faced further headwinds after the labour minister urged major chipmakers to share more of the gains from the AI-driven semiconductor boom with workers and suppliers. Hong Kong’s Hang Seng fell -1.2% and China’s Shanghai Composite lost -0.7%, while Australia’s ASX 200 declined -0.7% as a three-month low in iron ore prices weighed on miners. Defensive sectors outperformed, however, with healthcare stocks rallying, led by CSL (+5.8%), Cochlear (+5.6%), and ResMed (+4.3%). In New Zealand, the NZX 50 gained +0.5%, led by EBOS (+3.1%).
Commodities retreat across the board
WTI Crude fell -2.7% to US$930.54/bbl, Gold lost -3.2% to US$4,328.80/oz, while Iron Ore slipped -1.6% to US$102.00/MT.
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