By Amanda Cooper
LONDON, July 7 (Reuters) – Global stocks fell on Tuesday as technology shares slid despite blockbuster results from Samsung Electronics, with investors remaining concerned about the sustainability of the AI-driven rally, while oil prices rose on renewed Middle East tensions.
Samsung Electronics forecast a 19-fold jump in April-June operating profit to 89.4 trillion won ($58.4 billion), marking a third straight quarter of record operating profit for the world’s largest memory chipmaker.
Rather than reassuring investors, the results triggered heavy selling in Samsung and rival SK Hynix shares, weighing on South Korea’s Kospi and other technology-heavy Asian markets. Investors have increasingly questioned whether profit growth linked to artificial intelligence can be sustained if supply bottlenecks in key components such as memory chips ease.
“This is a record for Samsung, but rather than placate the markets, these strong results have led to fears that the AI chip sales boom cannot be sustained,” Kathleen Brooks, research director at XTB, said.
Morgan Stanley said in a note dated Monday that recent weakness in U.S. semiconductor stocks signalled a broadening of market gains, with investors likely to turn towards AI hyperscalers as well as consumer discretionary, transport and biotechnology shares.
SK Hynix is due to enter the Nasdaq this week in a $28 billion listing, one of the world’s largest new share sales, as the chipmaker seeks to capitalise on the AI boom.
Its shares, which were up as much as 350% this year at their peak two weeks ago, have since fallen about 30% amid a broader sell-off in global chip stocks.
In Europe, where exposure to volatile AI-linked stocks is more limited, the STOXX 600 rose 0.1%, supported by gains in oil and gas shares as crude prices edged higher amid signs that U.S.-Iran peace talks were losing momentum.
Adding to market concerns, Iran’s Revolutionary Guards fired at least two missiles at commercial ships transiting the Strait of Hormuz on Monday, Axios reported, citing two U.S. officials. The ships suffered significant damage, but there were no casualties, the report said.
Brent crude futures rose about 1% to $72 a barrel.
U.S. S&P 500 E-minis dipped 0.3%, Nasdaq 100 E-minis retreated 1.2% and Dow E-minis were down 0.02%.
NATO MEETING
U.S. President Donald Trump, who has pressed Europe to boost defence spending and clashed with European leaders over the Iran war and Greenland, is due to attend a NATO meeting in Turkey beginning on Tuesday.
Trump said on Monday the U.S. would either reach a deal with Iran or “finish the job,” renewing his threat of military action as Tehran projects defiance following the funeral of former Supreme Leader Ayatollah Ali Khamenei.
In currency markets, the dollar index, which tracks the U.S. currency against six others, was little changed at 100.88. The euro was down 0.03% at $1.1436.
The yen rebounded from beyond 162 per dollar, near 40-year lows, and was last up 0.17% at 161.79 per dollar. Traders remained alert for intervention amid signs of a possible shift in strategy by Japanese authorities.
Japanese government bond yields fell from multi-decade highs after a sale of super-long-term debt attracted strong demand.
The yield on benchmark U.S. 10-year notes rose 1.62 basis points to 4.495%, from 4.479% late on Monday.
Investors will get a further indication of how new Federal Reserve Chair Kevin Warsh is approaching monetary policy when minutes from the Federal Open Market Committee’s latest meeting are released on Wednesday, the first set published under his leadership.
(Additional reporting by Satoshi Sugiyama in Tokyo. Editing by Lincoln Feast and Mark Potter)
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