Tech Rebound Offsets Mideast Jitters as Global Markets Diverge

Global equity markets painted a sharply divided picture on Monday, as a powerful rebound in technology stocks lifted Wall Street’s major indices while Asian bourses tumbled and European exchanges slipped. The divergence reflected a tense interplay between bargain-hunting in the artificial-intelligence sector, which had suffered a brutal sell-off last week, and renewed geopolitical anxiety after the most direct military exchange between Iran and Israel since their April ceasefire.

Friday’s rout was triggered by a robust US jobs report that fuelled expectations the Federal Reserve may be forced to raise interest rates again this year, puncturing lofty valuations in AI-linked chipmakers and software firms. In a single session, US-listed semiconductor companies shed roughly $1 trillion in market value. The tech-heavy Nasdaq suffered its worst day since President Trump’s tariff shock in April 2025, tumbling 4.2 per cent.

Asian markets bore the brunt of the spillover when trading opened on Monday. South Korea’s Kospi index was halted for 20 minutes after plunging nearly 9 per cent within minutes of the bell, eventually closing 8.3 per cent lower. Japan’s Nikkei lost 3.9 per cent. In Europe, the damage was more contained: the pan-regional Stoxx 600 shed only 0.06 per cent, Frankfurt’s DAX eased 0.58 per cent and Paris’s CAC 40 dipped 0.23 per cent, while London was nearly flat. Stockholm’s exchange fell over 1 per cent, reflecting local nervousness about overheated AI investment and an unresolved oil crisis.

On Wall Street, the session ended without a single direction. The Dow Jones Industrial Average edged down 0.16 per cent to 50,786, but the S&P 500 added 0.30 per cent and the Nasdaq gained 0.86 per cent, supported by a sharp recovery in semiconductor stocks. The Philadelphia SE Semiconductor Index rallied, with Intel shares jumping after a report that Alphabet’s Google had ordered more than three million tensor processing units for 2025. Oil prices, which had spiked overnight on fears of supply disruption, retreated from their peaks after Iran announced the conclusion of its military operation, but crude remained elevated, capping broader market optimism.

Viewed from Washington, the pause in hostilities eased immediate security concerns, though analysts in London caution that a durable diplomatic off-ramp remains distant, leaving energy markets on edge. The dip-buying in tech suggests investors are betting that the AI boom is far from over, but with the Federal Reserve’s rate trajectory clouded by sticky labour data, trading floors from Seoul to New York are bracing for further bouts of volatility.