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July 24, 2026 - 08:11
7 minutes
(Bloomberg) — A global selloff in technology stocks gained momentum as doubts over returns from billions of dollars spent on artificial intelligence were compounded by a surge in oil prices that rekindled inflation concerns.MSCI’s Asia Pacific equities gauge fell 2.4%, following a selloff on Wall Street that saw the S&P 500 Index drop the most in a month. Regional chip bellwethers Samsung Electronics Co. and SK Hynix Inc. — beneficiaries of the global AI buildout — both slumped about 7%.Equity-index futures indicated more losses for the tech-heavy Nasdaq 100, even as Intel Corp. advanced 4% in extended trading after its forecast beat Wall Street estimates. European shares were set for a small gain.“Investors are already feeling increasingly jittery about the sustainability of the AI rally,” said Gerald Gan, chief investment officer at Reed Capital in Singapore. “That said, any short-term correction is likely to attract dip buyers once again. For now, the music has not stopped.”Further weighing on sentiment, Brent traded around $100 a barrel, having climbed over that level on Thursday after Houthi attacks on tankers in the Red Sea opened a new front in the Middle East conflict, while President Donald Trump threatened to extend US strikes on Iran. A 38% jump in the commodity this month has reignited concerns about inflation, prompting traders to price in prospects for higher interest rates.Government debt in Japan, Australia and New Zealand all declined as global bonds get pummeled by the resurgence in energy price, delivering losses to investors who bet the worst of this year’s rout was over and teeing up credibility tests for central bankers. Japan’s 40-year yield jumped 10 basis points to 4.01%. Gold extended its drop to about $4,025 an ounce, as bets for higher interest rates made the yellow metal less appealing.The jump in energy prices has compounded a tech-led market selloff as investors grapple with doubts over returns from AI spending and the prospect of more persistent inflation. Higher oil prices have complicated the Federal Reserve’s policy outlook ahead of its meeting next week, with money markets now fully pricing in a rate increase by September.“Escalating Middle East tensions have pushed crude prices higher, raising concerns that inflation could re-accelerate and delay interest-rate relief, maybe even cause the Fed to hike,” said Sameer Samana at Wells Fargo Investment Institute. “We think oil prices eventually normalize, but appreciate that things may get worse before they get better.”The market is also contending with a spate of attacks at the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast, which exports most of Kazakhstan’s crude.Oil inventories across the globe are depleted by months of conflict, raising the risk of a supply squeeze that threatens to weigh on the global economy if prices continue to climb.“Until recently, investors had largely assumed that tensions in the Middle East would eventually subside,” said Yugo Tsuboi, chief strategist at Daiwa Securities. “But with crude oil climbing above $90 a barrel, markets are beginning to recognize the situation warrants closer attention.”In tariff-related news, the US will collect duties of between 10% and 12.5% on imports from most major trading partners, its biggest move yet to reconstruct Trump’s tariff wall that was pierced by the Supreme Court.What Bloomberg’s Strategists Say…“With Brent crude trading above $100/bbl and the semiconductor complex already pressured by a momentum reversal and concerns over Chinese LLMs, markets are in an unforgiving mood. Next week’s heavy earnings slate from US hyperscalers, Samsung Electronics, and SK Hynix carries outsized stakes for Asia’s AI hardware theme.”— David Savage, Macro Squawk. Click here for the full analysis.Still, the focus remains firmly on the AI trade. Alphabet Inc. tumbled 7.1% Thursday after raising its capital-expenditure forecast, while Tesla Inc. slid 15% as profits disappointed despite strong electric-vehicle deliveries.Alongside Alphabet, Meta Platforms Inc., Microsoft Corp. and Amazon.com Inc. telegraphed in April they’d be spending as much as $725 billion this year on AI ambitions.“In terms of AI investment, the entire thematic is intact,” Jun Bei Liu, co-founder of hedge fund Ten Cap Investment Management, said on Bloomberg Television. “The only thing is the valuation part. The extremely expensive parts of the AI trade are going to be under a little more pressure. It is going to have to be led by earnings itself.”Corporate Highlights:Intel Corp. delivered a surprisingly strong revenue forecast for the current period, indicating that a surge in data center spending is helping fuel the chipmaker’s turnaround. SAP SE’s cloud revenue grew at a faster pace than analysts expected as customers move away from on-premises licenses ahead of the company’s deadline to halt support for legacy software. Volkswagen AG cut its revenue expectations for the year as falling sales in China intensify pressure on Chief Executive Officer Oliver Blume’s push to overhaul Europe’s largest carmaker. Allianz SE agreed to buy HSBC Holdings Plc’s Singapore insurance unit for S$2.7 billion ($2.1 billion) as the German insurer expands its presence in the Asian financial hub after a previously aborted attempt. Advanced Micro Devices Inc. announced a raft of new products for data centers that it said will outperform those from rival Nvidia Corp., aiming to make gains in a booming market for AI computing. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 7:09 a.m. London time Nasdaq 100 futures fell 0.4% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index fell 2.4% The MSCI Emerging Markets Index fell 2.7% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1379 The Japanese yen was little changed at 163.81 per dollar The offshore yuan was little changed at 6.7774 per dollar The British pound was little changed at $1.3312 CryptocurrenciesBitcoin rose 0.3% to $65,280.37 Ether fell 0.2% to $1,880.57 BondsThe yield on 10-year Treasuries advanced one basis point to 4.70% Germany’s 10-year yield advanced three basis points to 3.20% Britain’s 10-year yield advanced seven basis points to 5.10% CommoditiesBrent crude fell 0.6% to $100.09 a barrel Spot gold fell 0.5% to $4,027.25 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Abhishek Vishnoi, Alice French and Matthew Burgess.©2026 Bloomberg L.P.
