Nvidia fell 2.8% and Applied Materials slid 6.1% Friday, extending a weeks-long retreat in AI-linked chip stocks that pushed the S&P 500 down 0.8% and left the Nasdaq 1.7% lower.
Moonshot’s open-sourced Kimi K3 model added to fears that cheaper Chinese AI rivals could curb demand for high-end chips, reinforcing worries that AI valuations and profit expectations have run too far.
Taipei tumbled 6.5%, Tokyo 4% and Shanghai 3% as the sell-off spread globally; TSMC dropped 7.3%, while Seoul’s AI-heavy Kospi had already swung 6.2%, down 6.4% and down 8.9% on separate days this week.
Brent crude rose 3.1% to $86.87 after the U.S. widened airstrikes on Iran, keeping pressure on equities even as the 10-year Treasury yield eased to 4.52% from 4.57%.
University of Michigan consumer sentiment improved to its highest since February and inflation expectations eased, but the gain was tied largely to cheaper gasoline and could reverse if oil’s rally lifts pump prices again.
After a major AI stock sell-off, does TSMC’s massive new U.S. investment signal the market panic was merely a blip?
As low-cost Chinese AI models gain traction, can Western tech giants' massive valuations still be justified in the long run?
As the U.S.-Iran conflict disrupts global oil, can new pipelines truly secure energy supplies away from the Strait of Hormuz?
July 2026 Market Turmoil: Asian Equities Enter Correction, AI & Semiconductor Sell-off, and Oil Surges Amid Geopolitical Crisis
Overview
In July 2026, global financial markets faced significant volatility, driven by escalating geopolitical tensions and a surge in oil prices. Asian equities, especially Japan's Nikkei 225 and South Korea's KOSPI, experienced sharp corrections, with the semiconductor and AI sectors hit by a notable sell-off. This turmoil led to a difficult deleveraging moment for some speculative products, even though company fundamentals remained stable. The market downturn was amplified by rising oil prices due to disruptions in the Strait of Hormuz, highlighting how geopolitical risks and sector-specific pressures combined to create a challenging environment for investors.