According to Deutsche Bank Research, the S&P 500 and Nasdaq experienced significant declines last week due to a global sell-off in technology stocks, with the Magnificent 7 entering correction territory. The S&P 500 fell by 1.95% for the week and 0.05% on Friday, while the Nasdaq dropped 4.60% for the week and 0.24% on Friday. The Magnificent 7 group of stocks declined by 5.46% for the week, and are now down 12.6% from their May 28 peak, officially entering correction territory [1].
The weakness in the technology sector was primarily led by chipmakers, as the Philly Semiconductor Index slumped by 7.94% for the week, including a 5.29% drop on Friday. This occurred despite Micron beating revenue estimates for Q4, which provided only a brief reprieve midweek [1].
Asian equity markets showed mixed performance, with the KOSPI falling 2.24% and the Nikkei declining 0.88%, as technology stocks remained under pressure following the semiconductor sector's volatility. Easing geopolitical tensions in the Middle East offered some support, but new regional trade frictions emerged after China imposed tighter export controls on 20 Japanese entities, requiring government approval for shipments [1].
Looking ahead, US equity futures are showing signs of recovery, with both S&P 500 and Nasdaq futures up 0.57%. Additionally, 10-year US Treasury yields have risen by 1.2 basis points to 4.38% [1].
CONCLUSION
The recent tech-led correction has significantly impacted major US indices, particularly due to weakness in chipmakers. However, firmer US equity futures suggest a potential rebound, though ongoing trade tensions and sector volatility remain key risks for markets.