European Chip Stocks Fall, Tracking Asian Selloff Over AI Investment Worries

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• European semiconductor stocks fell sharply Tuesday morning, with Technoprobe, Siltronic, and Soitec down more than 4%, and ASM International, BE Semiconductor, Aixtron, STMicroelectronics, and Infineon down more than 3%, as renewed concerns over the sustainability of the global AI investment boom-specifically unresolved credit and profitability questions tied to AI spending-weighed on the sector.
• The selloff tracked Asian chip stocks, where South Korea's Samsung Electronics closed down 3% and SK Hynix fell 4.2%, pulling the Kospi down 3.7% to 5,552.74-its lowest close since April 7 and an end to a two-day rebound; the report characterized the prior two days' Asian chip-stock rebound as "short-lived."
• The declines came even after a Monday rebound in AI-related stocks in the US, where the S&P 500 rose 0.4% and the Nasdaq gained 1.1% following the prior week's worst weekly drop since June; European benchmarks fell more than 1%, with violent protests in France raising expectations of increased government spending, adding pressure on bond markets and pushing global yields higher.

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