European Midday Briefing: Shares Fall as Chip Stocks Tumble on AI Spending Worries

MARKET WRAPS

Stocks:

European shares were mostly lower Friday as AI-linked technology stocks slid and as tensions between the U.S. and Iran also weighed on sentiment.

Semiconductor companies were sharply lower

following another selloff in tech stocks in Asia. Bouts of volatility have plagued chip stocks in recent weeks as some investors worry that valuations and AI spending might be too high.

The selloff came even as TSMC posted its fifth consecutive quarter of record earnings, with profit jumping 77%.

"The inability of such impressive results to trigger a positive market reaction shows one thing: valuations across chipmakers have run ahead of themselves," Swissquote said.

Meanwhile, oil prices were on track for a weekly gain of more than 10% as the U.S. and Iran stepped up attacks and increased fears of broader regional disruptions.

"The renewed disruption has interrupted the recent recovery in regional supply, reviving concerns about tighter global markets , " Saxo Bank said. "The impact has been most acute in refined products, with diesel and gasoline prices surging, pushing U.S. refining margins to record highs and increasing the risk of higher fuel costs for consumers."

U.S. Markets:

Stock futures were down after the U.S. struck Iran for the sixth night in a row.

Forex:

The euro traded steady. Danske Bank expects the currency to gradually weaken against the dollar over the coming months.

The dollar edged lower as oil prices stabilized after rising recently, even as hostilities between the U.S. and Iran continue.

Sterling fell against the euro, pulling from a recent 13-month high. An imminent change of leadership in the U.K. raises concerns that sterling could be overvalued in the short term and the currency could give back its recent gains, ING said.

Bonds:

Eurozone government bond yields fell

in early trade, tracking Treasury yields lower. Societe Generale said Eurozone government bond yield spreads remained under pressure amid renewed geopolitical tensions.

10-year Bund yields are near levels high enough to prompt buyers, Danske said.

Treasury yields declined in early trade, while Brent oil prices rose, continuing to trade around the $85-per-barrel level amid ongoing hostilities between the U.S. and Iran.

Energy:

Oil prices edged higher, with Brent crude rising 0.4%, while WTI futures were up 0.8%.

Metals:

Gold prices slipped below $4,000 a troy ounce and are on track for a weekly decline of more than 3%. Escalating hostilities between the U.S. and Iran are fueling fears that higher energy prices could keep inflation elevated and prompt the Fed to raise interest rates.

Copper

Copper prices were lower in early trading and expected to stay range bound in the near term, according to Nanhua Futures.

Iron

Iron ore rose as inventories fell. The pressure on supply is expected to ease as overseas iron-ore shipments to China fall from their peak in 1H, Nanhua Futures said.

EMEA HEADLINES

Volvo Car Expects Sales to Strengthen on European Growth, U.S. Recovery

STOCKHOLM-Volvo Car expects growth in Europe and a recovery in the U.S. to spur significantly stronger sales in the second half of the year, despite continued challenges in China.

The Swedish carmaker-which is majority-owned by China's Zhejiang Geely Holding Group-said Friday that the auto market in China weakened for the whole industry during the first half while global uncertainty stemming from the Middle East conflict increased.

The U.K. Gets Another New Leader on Monday. His First Task: Reassure the Markets.

LONDON-Britain is on the threshold of its sixth prime minister in seven years, as Andy Burnham prepares to enter Downing Street having executed an understated coup while Mayor of Manchester to become the leader of the ruling Labour Party.

His appointment as premier, which will be formalized by King Charles at Buckingham Palace on Monday, marks the climax of a steep ascent for a politician who until last month wasn't even a lawmaker. In the past few weeks Burnham, a telegenic 56-year-old, has sketched out a vague plan for how he would revive the fortunes of his beleaguered Labour Party and steady a country where growth has flatlined and an upstart anti-immigration party dominates the political conversation.

Sweden's EQT Expects Strong Fundraising Momentum as It Posts Higher Net Profit

Swedish buyout group EQT said it enters the second half of the year with strong fundraising momentum, after it reported rises in net profit and revenue for the first half aided by higher fee-generating assets.

The investor made a net profit of 663 million euros ($758.8 million) for the first half compared with 346 million euros for the year-earlier period, it said Friday.

Burberry Reports Sales Growth as It Moves Forward With Turnaround Plan

Burberry posted an increase in sales for its first quarter, noting that it saw growth across divisions for the first time in three years as the British group continues to undergo a brand-revamp strategy.

For the quarter through June 27, the U.K. trench-coat maker recorded a 5% rise in comparable store sales compared with the same period a year earlier. This was in line with consensus estimates and was unchanged from the 5% increase it posted in the final quarter of fiscal 2026.

GLOBAL NEWS

Trump's Tightening Squeeze on Iran Will Heap More Pain on Its Battered Economy

DUBAI-President Trump is betting that reimposing the blockade on Iran and revoking its right to sell oil will throttle the regime's economy and convince it to release its hold on the Strait of Hormuz. Tehran is betting it can hold out.

The danger is, in the short term at least, that the renewed economic pressure hurts ordinary Iranians and leaves a destructive stalemate in the waterway.

The U.K. Gets Another New Leader on Monday. His First Task: Reassure the Markets.

LONDON-Britain is on the threshold of its sixth prime minister in seven years, as Andy Burnham prepares to enter Downing Street having executed an understated coup while Mayor of Manchester to become the leader of the ruling Labour Party.

His appointment as premier, which will be formalized by King Charles at Buckingham Palace on Monday, marks the climax of a steep ascent for a politician who until last month wasn't even a lawmaker. In the past few weeks Burnham, a telegenic 56-year-old, has sketched out a vague plan for how he would revive the fortunes of his beleaguered Labour Party and steady a country where growth has flatlined and an upstart anti-immigration party dominates the political conversation.

The Dallas Fed's Logan Says Interest Rates Need a Little Boost

Inflation came down a somewhat in June, but that hasn't changed Dallas Federal Reserve President Lorie Logan's mind about the need to raise interest rates.

In prepared remarks on Thursday, Logan said she currently believes that "modestly" higher interest rates would generate a better balance between economic risks and the Fed's mandates to stabilize prices and maximize employment.

U.S. Targets Iranian Bridges in Bid to Choke Off Regime's Supply Routes

The U.S. struck multiple bridges in Iran on Thursday in an effort to cut off supply routes to a port city and naval base in the Strait of Hormuz that Iran uses to attack ships and project power, according to a senior U.S. official.

Several attacks on bridges were reported in and around the port city of Bandar Abbas overnight Thursday, and highways connecting Bandar Abbas to nearby provinces were declared closed, according to Iran's state broadcaster IRIB.

China's Xi Touts Open-Source AI and Takes a Swipe at U.S. Dominance

SHANGHAI-Chinese leader Xi Jinping endorsed the building of open-source artificial-intelligence models, touting an approach that has helped the country catch up with the U.S. in global influence.

Speaking here Friday at an AI conference, Xi cast China as a champion of openness and equality, implicitly criticizing U.S. moves to protect its lead in AI semiconductors and models.

Boomers Were Supposed to Downsize. They Are Buying Bigger Homes Instead.

Angela and Victor Martino raised their two daughters decades ago in a ranch house measuring less than 2,000 square feet. The empty-nesters recently bought the 5,000-square-foot house next door.

After a year-long renovation, the Denair, Calif., home has a huge kitchen with space for the commercial meat slicer that Victor uses to cut a leg of prosciutto at family events. There is a playroom with polished concrete floors meant to withstand damage from their seven grandchildren. The primary bathroom tub has features to help them get in and out more easily as they get older.

Top Treasury Tax Official Ousted After Clashes With White House Over IRS Audits

WASHINGTON-The Treasury Department's top tax policy official was forced out of his job after he warned that the White House was at risk of violating a federal law prohibiting senior officials' involvement in IRS audits, according to people familiar with the matter.

Kenneth Kies, an assistant Treasury secretary and acting chief counsel of the Internal Revenue Service, is leaving those posts in the coming weeks.

Write to priscila.barrera@wsj.com

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

July 17, 2026 05:13 ET (09:13 GMT)

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