Multiple factors triggered the stock market sell-off that started on Friday and continued today, according to Charu Chanana, chief investment strategist at Saxo. While a strong US jobs report acted as the immediate trigger, the underlying issue was heavy positioning in AI and semiconductor shares. Chanana listed five reasons for the AI sector decline: crowded trades in semiconductors and AI stocks meant even minor setbacks could spark larger sell-offs; a narrow group of AI leaders had supported broader indexes, increasing fragility; high expectations meant results from firms like Broadcom failed to satisfy investors seeking stronger guidance and proof of accelerating demand; AI’s capital-intensive nature raised concerns over funding, spending discipline and returns, as seen with moves by Alphabet and Meta; and added geopolitical risks from Middle East tensions and oil volatility increased uncertainty in already stretched markets. Tate & Lyle agreed to a £2.7bn takeover by US rival Ingredion, lifting its shares 12 percent. The UK firm, now focused on sweeteners and stabilisers after shifting from sugar refining, received an offer at 595p plus 20p dividend, a 64 percent premium. The deal offers synergies in sugar substitutes amid shifting consumer preferences toward healthier options. Ingredion shares had fallen earlier this year. European chip-related stocks fell sharply at the open, with Besi down 4.5 percent, ASML off 3.2 percent, Aixtron dropping nearly 6 percent and Nokia declining 5 percent. The Stoxx 600 index fell almost 0.9 percent. Government bond yields rose, with UK 10-year yields up 3.5 basis points to 4.93 percent. London’s FTSE 100 dropped 0.4 percent to 10,326 points, led lower by Rolls-Royce and IAG, while BP and Shell rose 1.5 percent on higher oil prices. Britain’s jobs market cooled in May as hiring of permanent staff slowed.
