Key Takeaways
- Global technology stocks tumbled as the high-flying "AI trade" went into reverse, with Japan's Nikkei 225 plunging 4.9% and the Nasdaq 100 futures falling 1.5%.
- Volvo Cars (VOLCAR-B) reported a 50% drop in Q2 operating profit to 800 million SEK, but expects a second-half recovery driven by the EX60 electric SUV.
- Japan’s Prime Minister Sanae Takaichi signaled a push for the $1.8 trillion GPIF to increase domestic asset allocations to support national economic growth.
- Geopolitical tensions escalated as a tanker was struck by a projectile near the Strait of Hormuz, and Russian forces targeted port infrastructure in Odesa and Chornomorsk.
- Azerbaijan’s energy exports remained robust in H1 2026, with natural gas deliveries to Europe reaching 5.9 billion cubic metres.
Global equity markets faced significant downward pressure on Friday as investors aggressively pulled back from semiconductor and artificial intelligence stocks. The Financial Times reported that the sell-off was triggered by concerns over sustainable returns on massive AI investments, leading to a $1.3 trillion wipeout in global market value. In Asia, chipmaker Kioxia saw its shares crater by 16%, while Taiwan Semiconductor Manufacturing Company (TSM) fell over 7%.
Volvo Cars (VOLCAR-B) navigated a challenging second quarter, with the CFO citing external market pressures and higher raw material costs. Despite a sharp decline in quarterly profit, the Swedish automaker maintained its 20% stake in Polestar (PSNY) and reported that demand for its new EX60 model is currently outpacing production capacity. The company is prioritizing premium brand positioning in China over volume-driven discounts, even as sales in the region soften.
In Japan, Prime Minister Sanae Takaichi emphasized the government's intent to promote domestic investment through the Government Pension Investment Fund (GPIF). Takaichi noted that the fund is already accumulating domestic alternative assets under existing guidelines to bolster the local economy. Analysts suggest this move is part of a broader strategy to support the yen and encourage household participation in Japanese financial markets.
Energy markets monitored fresh data from Azerbaijan, where the Energy Ministry reported that BP (BP) produced 7.9 million tonnes of oil in the first half of the year. Total oil exports for the period reached 10.5 million tonnes, while gas exports to Europe continued to play a critical role in regional energy security. Meanwhile, oil prices reacted to renewed volatility in the Middle East following a projectile strike on a tanker approximately 19 nautical miles east of Khasab, Oman.
The S&P/ASX 200 (AXJO) closed 0.5% lower at 8,796.70 points, tracking the broader global weakness in technology and mining sectors. In Europe, investors remained cautious as the Russian Defence Ministry confirmed strikes on Ukrainian port infrastructure in Odesa and Chornomorsk. These developments continue to complicate global trade routes and maintain upward pressure on shipping insurance and logistics costs.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.