BANGKOK (AP) — World shares retreated Friday, led by heavy losses in Japan and South Korea as traders sold to lock in gains from recent rallies in stocks related to artificial intelligence.
In early European trading, Germany's DAX gave up 0.8% to 24,793.58, while the CAC 40 in Paris lost 0.4% to 8,398.14. Britain's FTSE 100 shed 0.4% to 10,490.62.
The future for the S&P 500 lost 0.2% while that for the Dow Jones Industrial Average edged 0.2% higher.
In Asia, Tokyo’s Nikkei 225 index shed 4.2% to 69,360.88 and the Kospi in Seoul plunged 5.8% to 8,411.21. Both recovered some ground lost earlier in the day.
Hong Kong's Hang Seng lost 1.8% to 22,667.13, while the Shanghai Composite index slipped 2.3% to 4,027.26.
In Australia, the S&P/ASX 200 was an outlier, gaining 0.2% to 8,764.20.
Taiwan's Taiex gave up 3.6%.
The wide swings in Tokyo and Seoul are typical of recent volatility in markets as investors react to the deluge of dollars heading into AI data centers and other investments. Shares in Japan and South Korea hit records this week and logged strong gains on Thursday after chipmakers Qualcomm and Micron Technology reported better than expected earnings.
In South Korea, market trends have been dominated by movements in stock in Samsung Electronics, the country's biggest company, and chipmaker SK Hynix, which like Samsung is collaborating with Nvidia on artificial intelligence.
Given that concentration, “a strong Micron print can produce a powerful upside chase one day; a new concern around memory costs, capex, or the durability of AI demand can reverse it violently the next,” Stephen Innes of SPI Asset Management said in a commentary.
Samsung's shares lost 5.3% on Friday, while those of SK Hynix fell 8.4%. In Tokyo trading, technology giant SoftBank Group Corp. lost 12.5% and computer chip testing equipment maker Advantest sank 3.2%.
On Thursday, the U.S. stock market drifted to a mixed finish after several AI stocks veered back up the roller coaster, while Apple shares dropped 6.1% after the company hiked prices on many of its products.
The S&P 500 finished nearly unchanged with a dip of less than 0.1% after swinging between gains and losses throughout the day. The Dow Jones Industrial Average added 71 points, or 0.1%, and the Nasdaq composite fell 0.5%.
Micron Technology helped lead the market after jumping 15.7%. The maker of computer memory reported much bigger profit and revenue for the latest quarter than analysts expected, and it gave a stronger growth forecast for the current quarter than Wall Street expected. That helped allay worries a bit that its stock had grown too expensive after coming into the day with a surge of 267% so far this year.
Micron and AI stocks broadly have been under intermittent pressure recently because of worries that their profits can’t possibly keep pace with the tremendous rallies for their stock prices. Beyond Micron, Qualcomm said late Wednesday that the acceleration of the AI era is forcing it to upgrade forecasts for its own growth in upcoming years.
SpaceX, meanwhile, fell 1% to drop below $153 for its lowest finish since its vaunted debut on the Nasdaq earlier this month.
While the AI boom regularly roils tech shares, other sectors have held relatively steady, noted Thomas Mathews of Capital Economics.
“Even if the AI boom turned into a bust the ‘non-tech’ parts of the stock market could conceivably shrug it off for a while, as they have this week,” he wrote in a report.
A report released Thursday showed U.S. inflation is behaving pretty much as economists expected, climbing to 4.1% last month from 3.8% in April. The hope is that it will ease because of a drop-off in oil prices.
The price for a barrel of Brent crude oil, the international standard, declined 2.3% to $73.77 per barrel early Friday. It has fallen from its highs above $100 caused by the closure of the Strait of Hormuz because of the Iran war, which slowed the global flow of oil.
U.S. benchmark crude oil lost 2.4% to $70.17.
In currency trading, the U.S. dollar fell to 161.65 Japanese yen from 161.80 yen. The euro rose to $1.1387 from $1.1371.
