Global stock futures and Asian markets plummeted early Friday, driven by escalating U.S.-Iran tensions and a widespread sell-off in semiconductor and technology stocks. Major indices are set for a losing week, with Netflix also experiencing a significant tumble after its earnings report. Meanwhile, European chipmakers mirrored the decline, while traditional safe-haven assets like gold and Treasurys saw gains amidst the rising geopolitical uncertainty.
Global stock futures tumbled early Friday, reflecting a challenging week on Wall Street and escalating international tensions. The U.S. completed its sixth consecutive night of strikes against Iran, adding to market unease, while a significant sell-off in semiconductor and technology stocks continued to weigh on investor sentiment.
Dow Jones Industrial Average futures slipped 0.8%, S&P 500 futures lost 0.9%, and Nasdaq-100 futures dropped 1.6% as tech firms faced increased scrutiny. Across Asia-Pacific, markets reacted sharply, with Japan's Nikkei 225 plunging 5.2%, the Topix declining 3.7%, and the Hang Seng index falling 2.2%. South Korean markets were closed for a public holiday. The escalating U.S.-Iran standoff, which has once again disrupted energy flows through the strategically vital Strait of Hormuz, is a major contributor to the market's volatility.
Thursday saw a tough session, primarily due to a decline in chipmakers. The S&P 500 shed 0.5%, the Nasdaq Composite dropped 1.5%, and the Dow closed 0.2% lower. The VanEck Semiconductor ETF (SMH) slid nearly 4% on Thursday and is down 6.9% for the week, marking its third weekly decline in four. Taiwan Semiconductor (TSM) lost more than 2% after delivering a mixed second-quarter report, despite its bottom line surging. Marvell Technology, STMicroelectronics, and Micron also experienced declines.
Despite this turbulence, the S&P 500 remains about 1% below its all-time high set in early June. Ed Clissold, chief U.S. strategist at Ned Davis Research, suggested that the market's resilience indicates it's "likely not a major bull peak," and a recession is improbable, though near-term economic slowdowns and sector consolidation could occur.
The chip sell-off spread to Europe, with Dutch semiconductor equipment makers ASMI and ASML down by 4.6% and 3.8% respectively. STMicroelectronics shares lost 5%, Infineon 4.2%, and BE Semiconductor 3.7%. Overall, European markets followed Asian peers lower, with the pan-European Stoxx 600 last seen down by 0.6%. Utilities and consumer staples stocks, however, bucked the trend as investors sought safer assets.
Swedish defense company Saab posted record orders and beat earnings expectations in the second quarter, benefiting from increased European defense spending. Its total backlog reached 317.7 billion Swedish crowns, marking a fifth consecutive quarter of growth. In contrast, Volvo Cars reported a 50% decline in quarterly operating profit, attributing it to a "very challenging" environment, particularly in the Chinese premium car market, though it anticipates significantly stronger sales in the second half of the year.
Amidst the Middle East tensions, traditional safe-haven assets gained strength. The 10-year U.S. Treasury yield fell to 4.537%, and spot gold rose 0.9% to 4,004.61 per ounce.
Asian tech stocks plummeted further, with SoftBank dropping 9.2%, Tokyo Electron losing 9%, and Advantest sliding 9.4%. Japanese memory chipmaker Kioxia plunged over 14% after a federal jury ordered it to pay $229 million in damages for patent infringement. In Hong Kong and Mainland China, major tech stocks like Tencent, Meituan, Kuaishou, Baidu, and Alibaba all saw declines.
In other corporate news, Seven & i Holdings Co. shares jumped over 3% on reports of a potential stake acquisition in Polish convenience chain Zabka Group, signalling its expansion into Eastern Europe.
This week's leading chip sell-off saw Astera Labs down 23%, Marvell Technology 20%, Arm Holding 19%, Micron Technology 13%, and STMicroelectronics 12%.
After-hours trading also saw significant moves:
- Netflix: Dropped more than 8% after its in-line second-quarter results failed to impress investors, compounded by news of reduced "What We Watched" reports.
- Alcoa: Dipped 2% despite beating Q2 analyst expectations, due to a lowered 2026 production outlook for alumina.
- Intuitive Surgical: Fell 10% after the surgical robotic tools maker maintained its full-year outlook for da Vinci robotic system procedures despite beating Q2 estimates.
