Global Tech Outage Exacerbates Shaky Global Markets

Global stock markets, hampered by an extensive technology outage, ended the week negatively due to a significant decline in major technology stocks, particularly those in the semiconductor industry. This downturn is driven by the anticipation of renewed US chip export restrictions on China, coupled with a sector rotation from blue chips to small caps.

In Europe, major indices saw sharp declines: the Euro Stoxx 600 dropped by 1.03%, the CAC 40 fell by 1.78%, the DAX slipped by 2.10%, and the FTSE 100 decreased by 0.58%. The tech sector was hit hard, with ASML shares down 14.25% and SAP falling 3.07%.

Novo Nordisk shares slumped over 9% due to competition from Roche’s experimental weight-loss pill, while Roche shares surged 10.74%. Luxury consumer stocks like LVMH, Hermes, and Christian Dior also declined ahead of earnings reports. 

Conversely, energy firms buoyed the British market, with BP and Shell rising 1.37% and 0.69%, respectively. The euro and the British pound remained flat against the US dollar following a sharp retreat on Thursday, and the ECB maintained its interest rates unchanged, indicating a flexible stance for September.

On Wall Street, technology stocks extended their decline for the second consecutive week. The Dow Jones Industrial Average rose 1.66%, but the S&P 500 fell 1.26%, the Nasdaq composite slid 2.87%, and the Russell 2000 gained 2.26%. 

The technology sector led the losses, down 3.26%. Most of the "Magnificent Seven" stocks saw losses, with Nvidia, Amazon, and Alphabet down 4.95%, 5.79%, and 4.31%, respectively.