A global selloff in technology stocks accelerated on Friday, sending Asian benchmarks to their steepest declines in months and dragging European indices lower, after a sharp rotation out of semiconductor shares on Wall Street. Taiwan’s Taiex index plunged 6.5%, its worst session since the “Liberation Day” tariff shock, while Japan’s Nikkei 225 fell 4%. The moves followed a 1.5% drop in the Nasdaq Composite on Thursday, where the Philadelphia Semiconductor Index lost 4.3%.

The rout was triggered by twin disappointments in the artificial-intelligence supply chain. Taiwan Semiconductor Manufacturing Co. raised its annual capital-spending forecast to as much as $64 billion and announced a further $100 billion investment in US production, stoking fears that the industry’s breakneck expansion is eroding free cash flow. Hours later, Alphabet shares slid 4.4% on news that the release of its flagship Gemini 3.5 Pro model had been delayed. After the close, Netflix fell more than 8% after forecasting a second straight quarter of slowing sales growth. The selloff hit Asian markets with heavy tech weightings hardest: Advantest and SoftBank each lost around 9% in Tokyo, while Hong Kong’s Hang Seng Tech Index dropped 4.4%. South Korean markets were closed for a holiday, but authorities pre-emptively banned new ETF listings tied to major technology firms and raised deposit requirements for retail investors to curb volatility. European bourses proved more resilient, with the Stoxx 600 down 0.8%, as the region’s lower exposure to hardware makers provided a buffer.

Compounding the risk-off mood, hostilities between the United States and Iran escalated sharply. Iran said it launched fresh attacks on US facilities in the Gulf, after a sixth consecutive night of American strikes on Iranian military targets. Brent crude rose above $85 a barrel, putting both major benchmarks on course for a weekly gain of more than 11%—the largest since April. Shipping traffic through the Strait of Hormuz slumped, and Houthi rebels in Yemen threatened Saudi oil infrastructure, amplifying supply fears. The surge in energy prices rekindled inflation concerns, with Kansas City Fed President Jeff Schmid calling price pressures his biggest worry and Dallas Fed chief Lorie Logan arguing for higher interest rates.

In currency markets, the dollar held steady as safe-haven demand offset receding expectations of further Federal Reserve rate increases. The yen languished near a 40-year low, prompting Japanese Finance Minister Satsuki Katayama to warn against speculative moves. Investors now price in roughly 27 basis points of Fed tightening by December. The Federal Reserve’s next policy meeting, scheduled for late July, now becomes the focal point for markets weighing the twin risks of an AI-driven equity correction and an oil-fuelled inflation pulse.