US equity markets ended Friday’s session in decline, pressured by a renewed downturn in chipmakers following a surprise advancement from a Chinese AI startup and persistent geopolitical instability in the Middle East. For the week, the Nasdaq 100 dropped 4.13%, the S&P 500 slipped 1.55%, and the Dow Jones fell 491 points, a 0.93% decline.
A significant development from Chinese AI firm Moonshot, which unveiled its Kimi K3 model as a competitor to leading offerings from OpenAI and Anthropic, further unsettled markets. This triggered a decline in Anthropic’s implied market valuation from $1.79 trillion to $1.66 trillion (-7.26%), while OpenAI’s pre-IPO valuation fell from $1.32 trillion to $1.25 trillion (-5.30%).
The news exacerbated existing concerns in the tech sector after the sharp correction in South Korea’s KOSPI index. The benchmark, which had surged approximately 120% in 2026 amid investor enthusiasm for memory chip stocks, has since tumbled over 30% from its mid-June peak. Additional strain emerged from leveraged investment products, including the KORU 3x ETF (down over 70%) and individual equities such as SK Hynix and Samsung Electronics.
Market focus this week will center on Q2 earnings reports from Tesla, Alphabet (Google), IBM, and ServiceNow. Beyond earnings, investors remain wary of Middle Eastern developments, as crude oil prices extended gains to $84.60—a five-week high—driven by escalating US-Iran tensions following nine consecutive nights of airstrikes.
Flash PMI data releases are expected to dominate the upcoming economic calendar.
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