Global equities experienced significant declines as rising yields and higher oil prices reinforced a stagflationary environment, according to Deutsche Bank strategists [1]. In the United States, the S&P 500 fell by 0.69% for the third consecutive session, with chip stocks being the primary driver of the downturn. The Philadelphia Semiconductor Index dropped 4.98%, marking its worst day in August so far [1]. The NASDAQ underperformed, losing 1.33%, while the Mag-7 group declined by 0.88%, led lower by Meta, which fell 4.42% [1]. The weakness was broad-based, as evidenced by the equal-weighted S&P 500's 0.45% decline [1].
European markets mirrored the negative sentiment, with the STOXX Europe 600 falling 0.69% for its fifth consecutive decline in 2026, a first for the year. The DAX and CAC 40 also posted losses of 0.80% and 0.82%, respectively [1].
Asian markets were not spared, with semiconductor-heavy indices suffering sharp losses. South Korea's KOSPI led the declines with a 5.44% drop, followed by the Nikkei (-2.85%), CSI 300 (-2.41%), and Shanghai Composite (-1.96%) [1]. The Hang Seng was the exception, posting a modest gain of 0.24% [1].
Looking ahead, equity futures suggest further weakness, with S&P 500 futures down 0.11% and DAX futures lower by 0.17% [1].
CONCLUSION
The chip-led selloff under stagflationary pressures has triggered broad declines across global equity markets, with both US and Asian semiconductor-heavy indices hit particularly hard. Market sentiment remains negative, and futures indicate the potential for continued weakness in the near term.