This content was published on
July 2, 2026 - 07:57
5 minutes
(Bloomberg) — Equities fell as a selloff in chip stocks spread to South Korea, reviving concerns the blistering rally in artificial intelligence shares this year may have gone too far, too fast. Brent slipped to the lowest since before the start of the Middle East war.The MSCI All Country World Index dropped 0.2%, with South Korea’s Kospi — which contains many companies involved in AI infrastructure buildout — slumping 6.2%. Meta Platforms Inc.’s reported plans for a cloud infrastructure business weighed on the mood. Asian chipmakers also got hit as Apple Inc. is in talks to buy chips from two Chinese semiconductor makers, according to people familiar with the matter.“AI-related stocks have moved up a lot and expectations are high,” said Joshua Crabb, head of Asia Pacific equities at Robeco in Hong Kong. “So we get periodic selloffs and any bad news triggers profit taking.”Equity-index futures for Wall Street gauges pared earlier gains to turn negative. European shares were set for a modest loss at the open after MSCI’s Asia Pacific gauge dropped 1.3%.Elsewhere, Brent fell as much as 1.3% to $70.63 a barrel, the lowest level since Feb. 27, as flows through the vital Strait of Hormuz climbed. Treasuries held their losses from Wednesday, while the dollar steadied. Gold rose for a second day to trade above $4,060 an ounce after Federal Reserve Chairman Kevin Warsh said price risks have come down in recent weeks.While the selloff in semiconductor stocks continued to drive sentiment in the equities market, investors took some comfort from Warsh’s comments and other central bankers suggesting inflation risks have become more balanced. Attention now shifts to the US jobs report on Thursday for fresh signals on the policy outlook after Warsh’s remarks damped expectations of a July rate increase.“At a minimum, his comments provided no fuel for speculation on a near-term July rate hike, and in our view suggest the new Fed chair – while keeping all options open meeting by meeting – does not currently see cause for an immediate hike,” said Krishna Guha at Evercore.Bloomberg Economics expects June payrolls to rise at a robust pace, exceeding even May’s strong gain. Hiring likely was especially strong in leisure and hospitality — boosted by the World Cup — while government employment should post its fastest increase of the year.A more than 6% slide in the Philadelphia Semiconductor Index Wednesday set the tone for Asian markets, with South Korean chip stocks leading the regional selloff.Samsung Electronics Co. dropped 7.5% and SK Hynix Inc. fell 11%. Kioxia Holdings Corp. tumbled 13% in Japan.Apple considering buying chips from China would hurt South Korean manufacturers. Meta’s reported plans that would sell access to AI computing power and models fueled concern the company may have overbuilt its capacity.“Meta considering selling its ‘excess compute’ suggests it may be struggling to find a good use for it or may have overbuilt,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “That would have negative implications for the ‘picks and shovels’ in Korea and Japan markets.”Thursday’s Asian stock losses came after a roller-coaster ride for tech shares from Seoul to New York in late June. South Korean stocks swung from euphoria to anxiety in gut-wrenching trading that underscored how fragile the AI rally has become.“Movements in Asian equities continue to be sensitive around the sustainability of the AI capex buildout and concerns of compute oversupply following Meta headlines,” said Hugh Lam, an investment strategist at Betashares.Corporate Highlights:OpenAI has begun discussions about giving the US government a 5% stake in the ChatGPT-developer, the Financial Times reported, citing two people familiar with the talks. Meta Platforms Inc. is developing plans for a cloud infrastructure business that will sell access to AI computing power and models, setting up a new vector of competition with industry leaders like Amazon Web Services, Microsoft Azure and Google Cloud. Alphabet Inc.’s Google was ordered to pay almost $2 billion to Klarna Group Plc’s Pricerunner unit in a dispute over the search-engine giant’s abuse of power in the market for comparison shopping services. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 6:54 a.m. London time Nasdaq 100 futures fell 0.1% The MSCI Asia Pacific Index fell 1.2% The MSCI Emerging Markets Index fell 1.8% Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 was little changed Hong Kong’s Hang Seng rose 0.6% The Shanghai Composite fell 1.5% Euro Stoxx 50 futures fell 0.1% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1385 The Japanese yen rose 0.1% to 162.35 per dollar The offshore yuan was little changed at 6.7902 per dollar The British pound rose 0.1% to $1.3291 CryptocurrenciesBitcoin rose 0.7% to $60,496.69 Ether rose 0.6% to $1,625.94 BondsThe yield on 10-year Treasuries advanced one basis point to 4.49% Japan’s 10-year yield advanced six basis points to 2.765% Australia’s 10-year yield advanced four basis points to 4.82% CommoditiesSpot gold rose 0.8% to $4,064.63 an ounce West Texas Intermediate crude fell 1% to $67.87 a barrel This story was produced with the assistance of Bloomberg Automation.–With assistance from Carmeli Argana, Sangmi Cha, Bing Hong Lok and Elaine Lai.©2026 Bloomberg L.P.
