Global Markets Feel Chip Shockwave Despite TSMC's Record Profit

Global stock markets experienced a downturn as investors shifted away from shares of major chip manufacturers, despite geopolitical tensions between the US and Iran, which saw oil prices fall. The US dollar strengthened, and Treasury yields rose amid the release of economic data and escalating tensions in the Middle East.

Analysts noted a decline in chip stocks across various regions, from Asia to the US. Even Taiwan Semiconductor Manufacturing Company (TSMC), a leading chip producer, reported a stronger-than-expected 77% profit increase. However, this impressive financial performance was insufficient to sway investors heavily invested in artificial intelligence-focused technology stocks.

In the US, retail sales saw a modest increase of 0.2% last month, aligning with expectations. While a drop in fuel prices impacted sales revenue at gas stations, consumer spending in other areas remained robust, supporting overall demand. Initial jobless claims fell to 208,000 for the week, lower than the 217,000 forecast by economists.

The economic data did not significantly alter investor expectations regarding the US Federal Reserve's interest rate policies, leading to only a limited rise in US Treasury yields. Meanwhile, oil futures saw a slight decrease. This occurred despite claims that Iran might instruct Yemen's Houthi rebels to close the Bab el-Mandeb Strait, a critical chokepoint for international maritime transport and global energy supply chains. US crude oil closed down 0.8% at $78.95 a barrel, and Brent crude fell 0.85% to $84.23 a barrel.