Key facts
- Global stock markets declined sharply due to a selloff in chipmakers.
- Asian markets, particularly Taiwan, experienced significant drops.
- European equity indexes also traded lower.
- Oil prices surged over 11% for the week amid escalating US-Iran tensions.
- US market futures indicated a weak open.
- The US dollar held steady, with receding expectations of Federal Reserve rate increases.
Global stock markets experienced a significant downturn on Friday, primarily driven by a sharp selloff in chipmakers. This decline rippled through Asian markets, with Taiwan's stock market suffering its worst day since US President Donald Trump's 'Liberation Day' tariffs, plunging over 6%. China's blue-chip index fell 3.6%, and Hong Kong's Hang Seng Index dropped 1.8%, with its tech index down 4.4%.
European equity indexes also traded lower, with the STOXX 600 falling 0.7%. Major bourses in Paris and Frankfurt saw declines, while Britain's FTSE remained flat. Analysts noted Europe's relative insulation due to a smaller technology hardware sector.
In commodities, oil prices surged, with Brent crude futures up 0.6% at $84.75 a barrel and US crude up 1.1% at $79.80. Both benchmarks were set for gains of over 11% for the week, their largest since April, following renewed military strikes in the Middle East. Iran reported fresh attacks on US facilities in the Gulf, following US strikes on Iranian military sites.
US market futures indicated a weak open, with Nasdaq futures down 2.2% and S&P 500 futures down 1.1%. South Korean markets were closed for a holiday, but authorities had previously announced temporary bans on new listings of certain technology-linked ETFs and increased deposit requirements to curb volatility.
The US dollar held steady, with receding expectations of Federal Reserve rate increases this year offset by safe-haven demand. Investors are now pricing in approximately 26 basis points of Fed hikes by December. The euro was flat against the dollar, while sterling saw a slight increase. The Japanese yen continued to trade near a 40-year low, prompting intervention warnings from Japanese officials.