Risk sentiment deteriorated sharply into the Friday 17 July close as a global semiconductor and AI stock rout — triggered by valuation concerns and competitive pressure from a new Chinese AI model — spread well beyond tech into broader equity markets, lifting the VIX 12.2% to 18.77. Geopolitical tensions in the Persian Gulf drove Brent crude up 4.59% to $88.10, gold reclaimed $4,000/oz, and safe-haven flows were evident across asset classes even as US Treasury yields edged modestly higher across the curve. Central banks remained a steady backdrop, with the Fed holding at 3.75% ahead of its 29 July decision, the ECB having hiked 25bp in June to 2.25%, and the RBA steady at 4.35% — all signalling limited near-term easing. The combination of a tech-led equity pullback, an oil price spike and a cautious Fed sets a challenging tone for the week ahead.
For Asia-Pacific markets opening this Monday, the Friday session delivered a stark preview: the Nikkei fell 4.03%, the Kospi collapsed 6.37%, the SSE dropped 3.05% and the Hang Seng shed 1.78% — all reflecting heavy selling in semiconductor and AI-exposed names, with Tokyo Electron -9.3%, Advantest -10.5% and SoftBank -11.4% among the hardest hit. The Nikkei VIX surging 14.22% to 36.86 signals that volatility is far from contained in the region. The ASX 200 closed -0.50% on Friday with its own VIX up 3.67% to 11.58, a relatively contained move, but the materials sector (-2.91%) was a notable drag while energy (+1.66%) and utilities (+1.77%) offered partial offsets — a pattern investors should expect to see tested again as the oil bid and tech weakness play out in early trade today.