(RTTNews) – European stocks may face heavy selling pressure on Friday as a sell-off in chipmakers intensified after Taiwan Semiconductor Manufacturing massively hiked its capital expenditures for 2026.
Adding to investor anxiety, Netflix forecast third-quarter revenue and earnings that fell short of Wall Street estimates. SpaceX called off Thursday’s Starship mega rocket launch at the last minute after some of the engines failed to ignite.
Hawkish comments from Federal Reserve officials and inflation risks stemming from higher energy prices and supply disruptions linked to the Iran war may also keep investors on edge.
Dallas Fed President Lorie Logan on Thursday called for “modestly” higher interest rates to balance the Fed’s dual mandate.
Arguing that inflation remains far above the Fed’s 2 percent target, she warned that without policy action, inflation could become more entrenched, requiring more severe rate hikes later.
Brent crude futures traded above $85 a barrel and were on track for a 12 percent weekly gain as shipping traffic slumped through the Strait of Hormuz. The U.S. intensified strikes against Iran, hitting overnight an oil tanker near the country’s main oil terminal.
U.S. stock futures were deep in the red ahead of earnings from prominent tech companies, including Alphabet, Amazon, Microsoft and Meta Platforms next week.
Asian markets traded lower for a second day running amid growing questions about sky-high artificial intelligence-driven valuations.
U.S.-China tensions also remained on investors’ radar after U.S. President Donald Trump accused Beijing of exploiting U.S. election data in an extraordinary primetime speech in Washington.
The U.S. dollar was steady in Asian trade but faced a weekly drop after the release of softer U.S.CPI and PPI data.
Gold edged up to $3,980 an ounce but was on track for a significant weekly loss on oil-led inflation worries.
U.S. stocks ended lower overnight as investors paused after a two-day rally. High-flying chip and memory stocks declined on concerns over lofty AI valuations and rising debt as every major hyperscaler races to build AI data centers.
Fresh flare-up in hostilities between the U.S. and Iran also weighed on markets as Washington launched a sixth straight day of strikes on Iran for control of the Strait of Hormuz.
Treasury yields rebounded after data showed initial unemployment claims declined more than expected last week. Retail sales experienced a modest uptick in June, supported by consumer spending even as gasoline prices fell.
The tech-heavy Nasdaq Composite tumbled 1.5 percent while the S&P 500 dopped half a percent and the Dow eased 0.2 percent.
European stocks ended mixed on Thursday as escalating Middle East tensions offset strong earnings.
The pan-European STOXX 600 gained 0.2 percent. While the U.K.’s FTSE 100 index rose half a percent, France’s CAC 40 finished marginally lower and the German DAX dipped 0.3 percent.
