Semiconductor and Korean equities plunge on AI trade volatility despite strong year-to-date gains and mixed global market performance.
Global equities experienced sharp swings as investors reassessed the AI trade, hitting semiconductor and Korean stocks hard. The Philly Semiconductor index fell 20.6% in its worst month since 2008, while the KOSPI slumped 22.2%, though both remain up over 50% year-to-date.
European markets outperformed, supported by sector rotation and a solid Eurozone Q2 GDP print of 0.4% quarter-on-quarter. The DAX, CAC, and FTSE 100 posted gains of 2.11%, 1.64%, and 1.23%, respectively, nearing record highs. The S&P 500 advanced 1.05% for the week, though the Mag-7 showed mixed results, with Microsoft and Amazon surging post-earnings while Apple and Meta declined.
Volatility was most pronounced in Korea, where the KOSPI surged 17.91% on Friday but still closed the week 1.42% lower after midweek declines. The AI-driven turbulence underscored divergent performance across regions and sectors.