AI Anxiety Crushes Chip Sector as Geopolitical Optimism Drags Oil Lower

Global risk appetite is squeezed between rising doubts about the sustainability of AI investments and signals of de-escalation in geopolitical tensions in the Middle East. Historic selling pressure in tech giants has triggered a panic sell-off spreading from Asian markets to the US, while the decline in oil prices provided relief in non-energy sectors. Investors are fleeing high-valuation tech stocks amid rising debt figures and China's semiconductor moves.

AI Bubble Fears and Bloodletting in the Chip Sector

News that Nvidia's AI financing commitments have exceeded $750 billion has raised deep concerns about debt ratios in the sector and the capacity of demand to match this investment pace. This situation caused a sharp depreciation in global chip manufacturers. China's move to develop deep ultraviolet (DUV) lithography machines exacerbated competitive pressure, accelerating the sell-off.

■Netherlands-based ASML shares fell 5.8% in the US.

■South Korean SK Hynix shares plunged 12.9%, while Samsung Electronics dropped 11.9%.

■Japanese maker Tokyo Electron fell 10.8%, Advantest 10.3%, and SoftBank Group 4.7%.

Geopolitical Easing and the Drop in Oil Prices

US President Donald Trump noting the possibility of a deal with Iran and the lowering of tensions in the Middle East created relief in commodity markets. Trump stating he is not satisfied with current interest rates and calling for the lowest rates also shaped expectations regarding policy rates. These developments dragged energy costs lower, positively impacting transportation and logistics stocks.

■October-dated Brent crude fell 1.3% to $84.8 per barrel.

■American Airlines gained 3.3%, and United Airlines 1.9%.

■Energy giants Exxon Mobil fell 1.4%, Chevron 2.5%, and Occidental Petroleum 4.1% under pressure.

Divided View in US and European Markets

Despite the collapse in chip stocks on the New York Stock Exchange, indices followed a mixed course. While the reduction in geopolitical risks and the drop in oil prices supported buying in industrial and transportation stocks, the tech-focused Nasdaq diverged negatively. In Europe, positive business data from Germany and company balance sheets kept risk appetite alive, but the hawkish tone of ECB officials kept rate hike expectations afloat.

■The Dow Jones rose 0.51%, while the S&P 500 moved flat and the Nasdaq lost 0.18%.

■Vodafone Group shares rose 4.8% following revenue expectations.

■Germany's Ifo business climate index came in at 86.6, above expectations.

■DAX 40 gained 1.04%, CAC 40 0.4%, and FTSE 100 0.42%.

Sell-off Wave Spreading from Asia to Borsa İstanbul

The global collapse in the chip sector was the biggest factor hitting Asian stock markets, with the drop in the Kospi index reaching historical dimensions. Borsa İstanbul also failed to protect itself from global selling pressure, continuing its negative trend. The Dollar Index holding at 101.5 exerted pressure on precious metals, while investors await US data and financial results from companies with bated breath.

■South Korea's Kospi index fell 10.1%, seeing its lowest level since April 14.

■In Japan, the Nikkei 225 retreated 4%.

■The BIST 100 index ended the day with a loss of 1.21% at 13,774.77 points.

■USD/TRY is trading at 47.3777 in the interbank market.

Markets are currently caught between two opposing forces. On one side, concerns of a 'bubble' from $750 billion financing commitments for AI infrastructure are forcing high-frequency algorithms (HFT) to flee tech stocks. On the other, the drop in oil prices is keeping rate cut expectations alive in inflation swaps. The sharp declines in Asian markets specifically highlight the fragility of risk appetite. Trump's calls for lower rates and the ECB's hawkish stance are increasing uncertainty regarding central bank policies, signaling that volatility will continue.