What’s going on here?

European tech stocks have slumped to their lowest point in over six months as a global sell-off gains momentum, driven by Intel’s severe premarket drop and Amazon’s sales slowdown.

What does this mean?

The STOXX Europe 600 technology index fell 3.6% to levels not seen since January, while the broader STOXX 600 index decreased by 1.3%. This slide was sparked by Intel’ s decision to suspend its dividend and cut 15% of its workforce as it shifts focus from traditional data center semiconductors to AI chips, causing Intel’s shares to plunge 20% premarket. European semiconductor firms, including ASM International, BE Semiconductor, and ASML, also took hits, sliding between 6.6% and 9.2%. On top of that, Amazon’s shares tumbled about 8% premarket amid slowing online sales growth, adding fuel to the sell-off. The ripple effect was felt globally, with the S&P 500 closing down 1.4%, Japan’s Nikkei falling 5.8%, and Korea’s KOSPI dropping 3.65%.

Why should I care?

For markets: Tech troubles ripple across globe.

Investor confidence in the tech sector has been shaken, leading to significant declines in key indices around the world. With Intel and Amazon’s disappointing news affecting the broader market, it’s essential to monitor how other tech giants perform this earnings season. Further declines in tech stocks or negative earnings reports could continue to drag down global equity markets.

The bigger picture: Global economic uncertainty looms large.

The sell-off underscores broader economic concerns that weigh on investors’ minds, from slowing growth to potential recessions in key markets. The shift from traditional technologies to AI and the adjustments companies must make can reverberate across other sectors, influencing global investment strategies. As companies navigate this new landscape, expect ongoing volatility and cautious sentiment in the markets.