Global stock markets took a significant hit on Friday, driven by a widespread retreat in the semiconductor sector. Investors appear to be rotating away from high-flying chipmakers—a move that has hit Asian markets particularly hard, with indices like Japan’s Nikkei and Taiwan’s benchmark falling sharply. Analysts at HSBC suggest this decline reflects growing skepticism regarding the AI-led rally, as concerns mount over potential overcapacity and whether the current tech cycle has finally reached its peak. Meanwhile, U.S. futures are also pointing toward a lower opening, reflecting the broader cautious sentiment sweeping through global trading floors.

While equities struggled, the energy market surged due to heightening geopolitical risks. Oil prices are on track for their most significant weekly gain in three months, jumping over 11% as military tensions between the U.S. and Iran escalate in the Gulf. This instability, coupled with fresh trade friction involving new U.S. tariffs on Brazil, has fueled a flight to safety. Despite the equity selloff, the dollar remained largely stable as traders balanced lower expectations for Federal Reserve rate hikes against the renewed demand for safe-haven assets, while gold prices edged slightly higher amidst the uncertainty.