Global stocks declined after renewed volatility in chip stocks, following strong earnings from Samsung Electronics that left investors hoping for more. Bond prices fell as oil prices rose at their fastest pace in more than two weeks.
Shares of Samsung, the world's largest memory chip maker by market capitalization, fell 7.5% in Seoul. Despite the company's quarterly profit surging 19-fold and operating profit exceeding expectations by nearly 8%, it failed to meet high investor expectations, dragging down shares of its regional peers and pushing the MSCI Asia Pacific Index down 1.6%.
While the pan-European STOXX 600 index rose 0.1%, Nasdaq 100 futures fell 0.8%, as SpaceX joined the index on Tuesday. Similar futures for the S&P 500 declined 0.2%.
Volatility puts renewed pressure on chip stocks.
Samsung achieved preliminary operating income of 89.4 trillion won ($58 billion) in the three months ending in June, far exceeding its performance for the entire year of 2025. Analysts had expected an average of 84.2 trillion won.
Albert Young, managing partner at hedge fund Petra Capital Management, told Bloomberg that the stock's decline suggests investors may have already priced in the strong results and are increasingly focused on the longer-term trajectory of the memory cycle.
The volatility represents the latest pressure on semiconductor stocks, the biggest beneficiaries of the global AI boom, after a record-breaking rally prompted traders to question valuations and the sustainability of the hundreds of billions of dollars in spending. The volatility is also prompting investors to broaden their exposure, with 17 out of 20 sectors in Europe posting gains on Tuesday.
Joachim Clement, director of strategy at Panmure Liberum, told Bloomberg: “The market’s reaction to Samsung’s results shows that investors now expect the company not only to beat estimates but also to raise future projections.” He added: “Another factor that could weigh on tech stocks today is SpaceX’s inclusion in the Nasdaq indices, as index-linked funds will sell some tech stocks to make room for SpaceX.”
Oil prices rise after a new attack on a tanker near Oman.
Brent crude rose 1.4% to $73 a barrel after a projectile struck a tanker carrying liquefied natural gas off the coast of Oman, in a new attack that tests the peace agreement reached between the United States and Iran in late June. US Treasury bond prices fell across the board, with the yield on the 10-year note rising three basis points to 4.50%.
While the US dollar remained virtually unchanged, gold continued its decline for the second day, with the spot price of the precious metal falling 0.9% to $4,127 an ounce, and Bitcoin falling by the same percentage to $63,185.
The Japanese yen held steady against the dollar at 161.96 yen per dollar, after a slight rise against the US currency, although data from investment centers showed hedge funds shifting to their largest bets on the Japanese currency's decline since 2007.
A new test of AI momentum
Recent volatility in technology stocks has left investors searching for fresh evidence that the AI boom is capable of maintaining its momentum.
Even after U.S. semiconductor stocks posted a record quarter, attention turned to whether rising capital spending, increasing competition, and expanding production capacity would provide the earnings growth needed to justify the high expectations.
Tim Waterer, senior market analyst at KCM Trade, told Bloomberg that the market is currently undergoing a rebalancing of valuations. After semiconductors dominated the market for months, investors are now diversifying into other areas that offer better value, tempering the excessive optimism that previously prevailed in high-risk technology stocks.
He added that this rotation may continue for some time until we see more parity in the ratings between the high-performance semiconductor brands and the rest of the market.
Bloomberg Markets Live strategist Mark Cranfield said the Kospi index is approaching its 50-day moving average, which was a buying zone for retail investors in late March. However, the prevailing simplistic view that everything related to artificial intelligence is a guaranteed win is not present this time.
