Markets sell off as OpenAI IPO delay rattles tech stocks

OpenAI IPO delay triggers tech-led sell-off

The catalyst for Friday's market turbulence was a New York Times report that OpenAI is considering pushing back its initial public offering (IPO) until next year. The news landed hard given how central the AI narrative has been to global equity gains in recent months.

SoftBank Group bore the brunt of the news, falling more than 12% in Tokyo trading. The Japanese technology conglomerate has built a significant portion of its investment thesis around its stake in OpenAI, making it one of the most direct casualties of any delay to a public listing.

Other AI-linked names in Japan followed suit. Advantest dropped almost 10% and Tokyo Electron lost more than 3%, while memory chipmaker Kioxia shed 9%. The sell-off reflected broader uncertainty about whether the AI investment boom could sustain its pace if the sector's most anticipated float is put on ice.

Analysts offered some longer-term reassurance, with one researcher noting that AI chipmakers remain supported by solid earnings and that the boom represents a structural industry shift rather than a fleeting trend. That may be true, but for now the headlines were doing the damage.

Asia's record quarter ends with a sharp reminder of volatility

Friday's retreat came after a remarkable quarter for Asian equities. Japan's Nikkei surged 35% over the three months to late June, its biggest quarterly gain on record, before falling 4.2% on the day. South Korea's KOSPI put in an extraordinary 66% quarterly gain, its best since 1998, before dropping nearly 6% and briefly triggering a circuit breaker.

The scale of those drawdowns is worth keeping in perspective. Quarter-end and month-end rebalancing flows were cited as a contributing factor, with fund managers trimming positions in outperformers after a period of extraordinary gains. Markets that move 30-60% in a quarter will naturally attract profit-taking.

Hong Kong was the regional outlier, with the Hang Seng Index falling 1.7% on the day and recording its third consecutive quarterly decline, down 8.5% for the quarter. The contrast with the rest of the region highlights the divergence between markets with different levels of AI and tech exposure.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 3% on Friday, trimming its weekly loss to 4.4%, though the index still posted a 23% quarterly gain, its strongest since 2009.

Wall Street mixed as Micron surges and Apple slides

US markets ended in mixed territory on Thursday, with the signals pointing in contradictory directions. Micron Technology surged nearly 16% to a record high after earnings and forecasts comfortably beat Wall Street estimates, reinforcing the view that demand for memory chips remains robust. Sandisk jumped 22% in the same session.

Apple moved sharply in the other direction, sliding 6.1% after announcing steep price increases for iPads and MacBooks. The company attributed the hikes to the surging cost of memory and storage chips, raising questions about whether big tech will increasingly face margin pressure as the AI supply chain heats up.

The S&P 500 closed near flat, the Dow added 0.14%, and the Nasdaq fell 0.46%. The Nasdaq is now on course for its biggest monthly decline since March 2025. The mixed picture reflects a market that is trying to weigh genuine earnings strength in semiconductors against the broader cost implications for the rest of the tech ecosystem.

US inflation data also crossed the wire, with the personal consumption expenditures (PCE) price index rising 4.1% in the year to May, breaking above 4% for the first time since April 2023. That matched forecasts, and Fed officials were careful in their language, but traders still nudged up the probability of at least one rate rise before year-end.

Oil falls as Hormuz flows increase

Crude prices fell around 2% on Friday as supply concerns eased. Saudi Aramco resumed oil loading at its Ras Tanura terminal after a near four-month halt, and shipping data confirmed that crude flows through the Strait of Hormuz had risen to their highest level since the conflict with Iran began in February.

Brent Crude fell to around $73.80 a barrel, putting both benchmarks on course for losses of roughly 8% on the week. The resumption of Ras Tanura loadings was a significant development, given that the terminal can handle supertankers carrying up to 2 million barrels each.

There were caveats. A cargo vessel was struck by an unknown projectile near Oman on Thursday, and the UN's shipping agency suspended its voluntary evacuation scheme in response. US officials said Iran fired on the vessel. Overall Hormuz traffic also remains a fraction of the pre-conflict daily average of around 125 ships.

Separately, earthquakes in Venezuela raised fresh supply concerns, though preliminary assessments suggested limited damage to the country's oil infrastructure. Venezuela's output was running at close to 1.2 million barrels per day before the quakes. You can follow crude price movements via our oil trading pages.

Yen holds near 40-year lows as intervention risk rises

The Japanese yen remained under pressure, trading just above 161.60 per dollar and within touching distance of its weakest level since 1986. The 160 level is widely seen as a line in the sand for Japanese authorities, and the currency has been trading through it for some time now.

Tokyo's core inflation data accelerated in June, adding to the case for a Bank of Japan rate rise. Several banks brought forward their BoJ rate hike calls to October after the print, citing second-round effects from higher energy costs. The dollar index fell 0.1% as US rate hike bets were pared slightly following the PCE data.

For traders active in forex trading, the yen cross remains one of the most closely watched pairs right now. Bitcoin recovered slightly to around $59,800 after hitting its lowest level since September 2024 earlier in the week, while ether remained under pressure near monthly lows.