Deutsche Bank strategists highlight that rising Oil and gas prices, escalating US–Iran tensions and renewed doubts over the AI (Artificial intelligence) trade weighed on global equities. Chipmakers led declines, pushing the Philly semiconductor index into a bear market, while the S&P 500 and Nikkei also fell. European equities proved more resilient, and futures are modestly higher this morning despite ongoing geopolitical risks.
Chip-led selloff and energy shock weigh
“Geopolitical fears also interacted with fresh concerns around the AI trade, which meant that equities took a hit around the world. That was particularly clear for chip stocks, with the Philly semiconductor index down -9.97% last week (-1.63% Friday), marking its biggest weekly decline since the week of the Liberation Day tariff announcements last year.”
“Moreover, that meant the index moved into a bear market, having now shed -20.23% since its closing peak back on June 22. In turn, that coincided with other equity declines, with the S&P 500 down -1.55% (-1.01% Friday), and Japans Nikkei also had its biggest decline since the week of Liberation Day, falling -6.44%.”
“However, European equities were relatively resilient, with the STOXX 600 up +0.07% over the week (-0.34% Friday).”
“In response, this morning Brent is up +2.45% to $90.26/bbl after a ninth consecutive night of US strikes against Iran. Given the escalation US futures are performing relatively well with S&P (+0.15%) and Nasdaq (+0.47%) contracts higher.”
“Chinese related equities are strong, with the Hang Seng (+2.04%), CSI 300 (+1.55%) and Shanghai Composite (+1.18%) all higher. Elsewhere the S&P/ASX 200 (+0.17%) is edging higher, and Japanese markets are closed today for the Marine Day holiday.”