Semiconductor sell‑off and US‑Iran tensions drag global markets lower

Wall Street closed in the red, with the Dow Jones down 0.2%, the S&P 500 off 0.5% and the Nasdaq falling 1.5%. The decline was led by a sharp sell‑off in semiconductor stocks after Taiwan Semiconductor Manufacturing Co (TSMC) announced a larger-than‑expected capital‑expenditure plan for AI‑focused chips, sparking fears of an AI‑investment bubble. Major chip makers such as SK Hynix (‑11%), Samsung (‑7%), Micron (‑8%) and ASML also slid, pulling down indices worldwide.

In Asia, equity indexes fell as chip‑related losses spread from South Korea to Japan and the broader MSCI Asia‑Pacific gauge slipped. The downturn coincided with renewed Middle‑East hostilities: the United States re‑imposed a naval blockade on Iranian ports and Iran threatened to close the Bab el‑Mandeb Strait, pushing oil prices higher.

U.S. inflation data (producer‑price index) came in softer, easing expectations of near‑term Fed rate hikes, but the geopolitical risk and uncertainty over AI‑related capital spending kept markets on the defensive.