In company news, Micron forecast stronger than expected quarterly profit expectations, while Qualcomm revealed it expects $15bn in sales from its data centre business by 2029. The pair added over $400bn in market value after the bell on Wednesday, however this was not enough to revive overall tech sentiment, with the sell-off resuming.
For the week the S&P 500 lost nearly 2%, while the tech-heavy Nasdaq Composite fell 4.6%. In contrast the Dow Jones Industrial Average added 0.6%, while the small-cap Russell 2000 outperformed and rose 1%. The personal consumption expenditure price index rose 4.1% year-on-year in May, reinforcing expectations for a rate hike from the Federal Reserve later this year. Oil prices declined over the week as tankers started moving through the Strait of Hormuz. For the week Brent crude was down over 10%. Alongside this, Treasury yields also declined, with the yield of the 10-year Treasury noted ending down at 4.37%, while the dollar index was higher.
European markets saw mixed performance for the week, with the STOXX 600 ending flat. Investors continued to monitor the evolving US-Iran negotiations, as well as Israel and Lebanon signing a framework agreement in a first step towards ending fighting between Israel and Hezbollah. Similar to the US, Europe also experienced fluctuations in AI-linked stocks, with Friday’s sell-off weighing. The previous session the index had logged a record close, led by a jump in healthcare stocks, boosted by Bayer’s US court victory. Most regional indices logged losses although the UK FTSE 100 ended 1.4% higher. This came as Prime Minister Keir Starmer resigned following months of political pressure.
One market that was particularly hit by the sell-off in AI was South Korea’s Kospi. It had initially started the week on positive footing, helped by gains from index heavyweights, however it later saw circuit-breaker halts on Tuesday and Friday as tech names slid. Overall, the Kospi ended 7.1% lower. Japan’s Nikkei 225 also saw profit-taking in tech stocks, declining 2.7% for the week. Moves in the Japanese yen also continued to be closely monitored, with market watchers on the lookout for any signs of intervention. The currency weakened but has not yet reached a 40-year low. In Hong Kong losses were more concentrated in large internet names, with the Hang Seng down 5.2%.