Global Markets Mixed as AI Stocks Diverge While Dow Extends Record Rally

BY EMMANUEL OGBONNA

Global stock markets delivered a mixed performance on Friday as investors weighed continued strength in U.S. equities against renewed volatility in artificial intelligence-related technology stocks. While Wall Street’s Dow Jones Industrial Average climbed to another all-time high in the previous session, uneven performance among major semiconductor and AI companies kept broader market sentiment cautious.

With U.S. financial markets closed on Friday in observance of the Independence Day holiday, investor attention shifted to Europe and Asia, where trading reflected a blend of optimism and caution. Futures trading pointed to a modestly higher opening for the S&P 500, with contracts gaining 0.3%, while Dow futures eased 0.2% following Thursday’s record-setting performance.

European markets traded without a clear direction. Germany’s DAX index advanced 0.4% to 25,667.73 as investors continued to support industrial and technology shares. France’s CAC 40 slipped 0.1% to 8,471.19, while Britain’s FTSE 100 fell 0.4% to 10,613.55 amid profit-taking and cautious positioning ahead of the next round of economic data.

Asian markets showed stronger momentum, led by an impressive rebound in South Korea. The Kospi index surged 5.8% to close at 8,088.34 after suffering a sharp decline of nearly 8% during the previous trading session. Investors returned to major technology names following heavy selling earlier in the week.

Samsung Electronics, South Korea’s largest listed company and one of the world’s leading semiconductor manufacturers, jumped 8.2%. Fellow memory chip producer SK Hynix posted an even stronger gain, soaring 10.9% as bargain hunters moved back into the sector despite ongoing concerns over AI-related valuations.

Japan’s Nikkei 225 climbed 1.5% to finish at 69,744.07. Technology shares contributed to the advance, with chip equipment manufacturer Tokyo Electron rising 0.4%, while memory chip maker Kioxia recorded an impressive 9.2% gain.

Elsewhere across the region, Hong Kong’s Hang Seng Index added 1.3% to 23,350.03, supported by technology and financial stocks. Mainland China’s Shanghai Composite Index rose 0.4% to 4,043.64 as investors remained encouraged by expectations of continued policy support for economic growth.

Taiwan’s Taiex index edged 0.1% higher, while India’s Sensex gained 0.4%. Australia’s S&P/ASX 200 also posted solid gains, climbing 1.4% to close at 8,844.40 as strength in mining and financial shares lifted the broader market.

Market analysts said the sharp recovery across several Asian markets reflected renewed investor confidence after recent heavy selling in technology stocks.

According to Stephen Innes of SPI Asset Management, Asian markets managed to regain stability following two difficult sessions driven largely by weakness in technology companies. He noted that South Korea’s market demonstrated how quickly investor sentiment can reverse after aggressive selling pushes valuations lower.

On Wall Street, Thursday’s trading session produced another record close for the Dow Jones Industrial Average, which gained 1.1% to finish at 52,900.07. The blue-chip index benefited from broad gains across industrial, financial and healthcare companies.

The broader S&P 500 ended virtually unchanged, adding less than 0.1% to close at 7,483.24 despite nearly 70% of its constituent stocks finishing higher. Losses among several of the market’s largest technology companies offset gains across much of the index.

The Nasdaq Composite, which has a heavier concentration of technology stocks, declined 0.8% to 25,382.67 as investors continued reducing exposure to several high-profile artificial intelligence companies.

A key factor influencing Thursday’s trading was the latest U.S. employment report, which showed employers added 57,000 jobs during the previous month. Although the labor market continued to expand, the figure came in well below economists’ expectations of approximately 100,000 new jobs and represented a noticeable slowdown from May’s pace of hiring.

The softer employment report strengthened expectations that inflationary pressures could ease in the coming months. Recent spikes in global oil prices linked to conflict involving Iran had fueled concerns about rising inflation, but crude prices have since retreated below levels seen before the conflict intensified.

If inflation continues to moderate, investors believe the Federal Reserve could adopt a less aggressive approach toward interest rate increases during the remainder of the year. Lower borrowing costs generally provide support for stock markets by making financing less expensive for businesses and consumers while increasing the attractiveness of equities compared with fixed-income investments.

Cryptocurrency-related stocks also attracted buying interest after Bitcoin recovered from recent losses. The digital asset gained roughly 2% after falling close to its lowest level since 2024 earlier in the week. Bitcoin added another 0.9% in early Friday trading.

The rebound in cryptocurrency prices lifted shares of several companies tied to the sector. Robinhood Markets advanced 3.8%, while Coinbase Global climbed 3.9% as investors responded positively to improving sentiment across digital assets.

Despite the broader market’s resilience, selling pressure continued in parts of the semiconductor industry. Investors remain concerned that the rapid rise in AI-related stocks over the past two years may have pushed valuations beyond levels justified by future earnings growth.

Questions have also emerged about whether the enormous investments being made in artificial intelligence chips, data centers and computing infrastructure will generate the level of profits and productivity improvements that investors have anticipated.

Micron Technology erased early gains before ending the session down 5.5%, extending losses after plunging 10.6% the previous day. Nvidia declined 1.4%, while semiconductor equipment manufacturer Lam Research dropped 10.2%, making them among the largest drags on the S&P 500.

Nvidia remains one of the world’s most valuable companies with a market capitalization approaching $4.7 trillion. Because of its enormous size, even relatively modest declines in its share price have a significant impact on the performance of major U.S. stock indexes.

In commodity markets, Brent crude, the international oil benchmark, slipped less than 0.1% to $71.76 per barrel. U.S. West Texas Intermediate crude declined 0.2% to $68.48 per barrel.

Currency markets were relatively stable. The U.S. dollar traded at 161.14 Japanese yen, little changed from 161.11 yen in the previous session. The euro strengthened slightly to $1.1451 from $1.1431 as investors monitored global economic data and central bank policy expectations.