A wave of selling swept through global semiconductor shares on Thursday, dragging down major equity indices from Seoul to New York, after Taiwan Semiconductor Manufacturing Company (TSMC) raised its capital expenditure forecast to $64 billion, stoking fears that the vast sums pouring into artificial intelligence may not deliver timely returns. The Philadelphia Semiconductor Index tumbled 3.5%, while the tech-heavy Nasdaq Composite fell 1.4% and South Korea’s KOSPI, heavily weighted toward chipmakers, plummeted 6.4%.

TSMC’s results were robust, with profits beating estimates, but the decision to lift investment spending by $4 billion unsettled investors already questioning the sustainability of the AI boom. Analysts in New York noted that the four largest US hyperscalers are on track to invest over $725 billion this year alone, and any sign of diminishing marginal returns triggers sharp repricing. The anxiety was compounded by a fresh escalation in hostilities between the United States and Iran, with Washington expanding strikes on Iranian targets and Tehran retaliating against US bases in Kuwait and Jordan. Brent crude rose above $85 a barrel, up roughly 11% for the week, reviving inflation concerns and pushing benchmark government bond yields higher.

In Europe, the Stoxx 600 ended marginally lower, with Frankfurt’s DAX off 0.34% and Paris’s CAC 40 down 0.05%, though London’s FTSE 100 managed a 0.54% gain, cushioned by its smaller tech exposure and a 0.1% monthly GDP print that kept the UK growth narrative intact. The sell-off was most acute in Asia, where the KOSPI has now shed nearly 20% this month after doubling in the first half. Japan’s Nikkei 225 fell 2.6%. On Wall Street, the Dow Jones Industrial Average eked out a 0.28% advance as investors rotated into defensive healthcare names, but the S&P 500 slipped 0.12% and the Nasdaq 100 lost 1.2%.

Amid the market turbulence, Swiss engineering group ABB announced a $5.5 billion agreed takeover of UK-listed Rotork, a manufacturer of flow-control equipment, at 503 pence per share. The deal, which values the Bath-based company at a premium and will see it operate as a separate division, extends a run of foreign acquisitions of British industrial firms and is expected to close in the first half of 2027, subject to shareholder and regulatory approvals. For broader markets, the immediate focus turns to eurozone consumer price data and US housing starts due later Thursday, while the Federal Reserve’s July policy meeting is the next major test of whether rate-hike expectations, now priced at just 10%, will be revived by the oil-driven inflation pulse.