World stocks fell to a one-month low, with Asian chipmakers leading a broad selloff. South Korea's KOSPI index dived more than 10% to a three-month low, triggering a circuit breaker and heading for its largest monthly fall since the 1997 Asian financial crisis. Shares in SK Hynix and Samsung Electronics both lost over 12% of their value. Japan's Nikkei slid about 4%, touching a two-year low, and Taiwan's market fell more than 4% with TSMC taking a significant hit.
The rout was fueled by concerns over Chinese competition in the chip industry and the sustainability of AI funding. A report indicated China began manufacturing domestically developed immersion deep ultraviolet lithography machines, traditionally dominated by Dutch supplier ASML, causing ASML shares to drop 8.5%. Additionally, Chinese chipmaker CXMT Corp.'s strong stock market debut, raising $8.6 billion, intensified fears of increased competition in memory chips.
In the U.S., despite the tech-heavy Nasdaq Composite ending down 0.22% at 24,876.91, the Dow Jones Industrial Average rose 1.03% to 52,747.53, and the S&P 500 gained 0.22% to 7,429.22. Gains in companies like Boeing and Coca-Cola helped offset the tumbling chip stocks. U.S. crude oil fell 4.14% to $79.16 a barrel, and Brent crude dropped 5.01% to $83.93 per barrel. Treasuries rose for a third consecutive day, with the yield on benchmark U.S. 10-year notes falling 3.88 basis points to 4.602%. Investors are now eyeing the Federal Reserve's monetary policy decision, with Fed funds futures pricing in a 32% chance of a rate hike on Wednesday, down from 38% on Monday.
