By Ovunc Kutlu
ISTANBUL (AA) - The world's biggest semiconductor manufacturing and technology companies saw their shares plummet Friday amid a major selloff around the world.
Japanese multinational conglomerate corporation Sony's market price fell 6.65% on the Tokyo Stock Exchange, while shares of multinational electronics manufacturer Kyocera were off 6.72%.
In South Korea, Samsung posted a 4.21% loss and chip supplier SK Hynix, which supplies fifth-generation high-bandwidth memory chips to American chipmaker Nvidia, saw its stock price diving 10.4%.
Taiwan Semiconductor Manufacturing Company, the world’s biggest manufacturer of chips, recorded a decrease of 5.94% on the Taiwan Stock Exchange.
Among European tech companies, Dutch ASML Holding, which specializes in the development and manufacturing of photolithography machines that are used to produce computer chips, fell 11.18% on the Euronext Amsterdam's AMX index.
Another Dutch firm, ASM International, which designs, manufactures and sells wafer processing equipment for the fabrication of semiconductor devices, fell 12.63% on the AMX index.
French-Italian semiconductor manufacturer STMicroelectronics, headquartered in Switzerland, saw its price fall 5.63%, while Germany's biggest semiconductor manufacturer, Infineon Technologies, lost 5.05%.
Stocks of British semiconductor and software design company Arm Holdings' decreased 6.63% on the Nasdaq.
In the US, shares of artificial intelligence (AI) hardware and software supplier Nvidia fell 1.78%, while semiconductor firm AMD lost only 0.03%.
Qualcomm, the American semiconductor manufacturer related to wireless technology, posted a decline of 2.86%.
Among tech majors, Google's parent Alphabet and Microsoft lost 2.35% and 2.07%, respectively, while Amazon plummeted 8.78%.
Meta, the parent company of Instagram, WhatsApp and Facebook, saw a decrease of 1.93%.
Apple shares, on the other hand, were up 0.69%, staying on top as the world's most valuable company with a market cap of $3.43 trillion, against Microsoft's $3.05 trillion.
The worst performer, however, was Intel as the American chipmaker saw its stock price plummet 26.06%, posting its worst trading day on record.
The sudden decline in tech companies' shares comes as stock exchanges around the world saw a major selloff, which was dubbed “red Friday” by analysts.
The Asia Dow, which includes blue-chip companies in the region, was down almost 159 points, or 3.86%, to 3,963.
Tokyo's Nikkei 225 stock exchange fell a massive 2,216 points, or 5.81%, to 35,909.
The Hang Seng, the benchmark for blue-chip stocks trading on the Hong Kong stock exchange, was off 359 points, or 2.08%, to 16,945.
China's Shanghai Stock Exchange declined 27 points, or 0.92%, to finish the week at 2,905.
The Indian Sensex benchmark lost 885 points, or 1.08%, to end at 80,981. The Singapore index shed 38 points, or 1.12%, to finish at 3,381.
In Europe, the STOXX Europe 600, which includes around 90% of the market capitalization of the European market in 17 countries, fell almost 14 points, or 2.73%, to close at 497.85.
The UK's FTSE 100 shed 108 points, or 1.31%, to 8,174. Germany's DAX dove 421 points, or 2.33%, to 17,661.
France's CAC 40 slumped 118 points, or 1.61%, to end the session at 7,251. Spain's IBEX 35, meanwhile, decreased 181 points, or 1.67%, to close at 10,672.
Italy's FTSE MIB was the worst performer of the day, plummeting 838 points, or 2.55%, to end the day at 32,018.
In the US, the tech-heavy Nasdaq dove almost 418 points, or 2.43%, to end the week at 16,776 and the S&P 500 fell 100 points, or 1.84%, to 5,346.
The blue-chip Dow Jones, meanwhile, plummeted 610 points, or 1.51%, to 39,737.
The major selloff in the US stock exchanges came as jobs figures released Friday before the market opening indicated a cooling labor market and increased the likelihood of a rate cut by the Federal Reserve in September.
Investors are worried, however, that the central bank could have been too late to ease its monetary policy, pushing the US economy into a recession.
In addition, the US manufacturing sector contracted in July for the fourth consecutive month, according to a report released Thursday by the Institute for Supply Management (ISM).
"U.S. manufacturing activity entered deeper into contraction," said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee. "Demand was weak again, output declined, and inputs stayed generally accommodative."
"Demand remains subdued, as companies show an unwillingness to invest in capital and inventory due to current federal monetary policy and other conditions," he added.
New orders in the US decreased in July for the first time in three months, according to a report by global data provider S&P Global on Thursday.
Output prices increased only marginally, at the slowest pace for a year, despite a further increase in input costs, it said, adding new businesses decreased at the fastest pace in 2024 so far, while new export orders also declined.
American firms reported a general slowdown in market demand, with clients often reluctant to commit to new projects at the current time, according to the report.
Mark Zandi, a chief economist at Moody’s Analytics, warned Friday that American consumers may turn more cautious, and if they do the economic expansion is at significant risk.
"The Fed has made a mistake in not cutting interest rates already, hopefully it isn’t an existential mistake," he wrote on X. "The increase in unemployment threatens to take on a life of its own, weighing on consumer spending, causing more layoffs, and igniting a negative self reinforcing cycle."
Zandi said the clear message in Friday's soft jobs report is that the Fed needs to cut interest rates.
"They should have begun cutting rates months ago. Job growth is decidedly throttling back, unemployment is rising quickly, hours worked per week are low and falling, and temporary help jobs continue to evaporate. Wage growth and inflation are back to the Fed’s target," he explained.
"The question isn’t whether the Fed should cut in September, but by how much," he added.
While the probability of a rate cut of 25 basis points at the Sept. 18 Fed’s meeting stood at 28.5% on Friday, according to the FedWatch Tool provided by the Chicago Mercantile Exchange Group, the probability of a rate cut of 50 basis points jumped to 71.5%.