TSMC capex hike reignites AI bubble fears, sending European futures lower

European stocks are set to open sharply lower Friday as a sell-off in semiconductor stocks intensified after Taiwan Semiconductor Manufacturing Co. (TSMC) massively hiked its capital expenditures for 2026, according to Nasdaq. The move stoked fears that the artificial-intelligence rally has moved too far too fast, rippling from chipmakers into broader markets.

Asia had already taken the hit. MSCI’s Asia Pacific equities gauge dropped 3%, heading for its lowest close in two months, CoinDesk reported. Japan’s Nikkei 225 slumped 5% in its worst session since March. TSMC was on track for its biggest one-day decline since April 2025, while Japan’s Kioxia sank as much as 16%.

The anxiety extended to U.S. futures, which were deep in the red ahead of earnings from major tech companies including Alphabet, Amazon, Microsoft and Meta Platforms next week, Nasdaq noted. On Thursday, the tech-heavy Nasdaq Composite tumbled 1.5%, the S&P 500 fell 0.5% and the Dow Jones Industrial Average eased 0.2%.

European benchmarks ended mixed Thursday — the pan-European STOXX 600 gained 0.2%, the U.K.'s FTSE 100 rose 0.5%, France’s CAC 40 finished marginally lower and the German DAX dipped 0.3% — but futures point to heavy selling pressure at Friday’s open, per Nasdaq.

Oil, geopolitics add to risk-off tone

Brent crude futures traded above $85 a barrel and were on track for a 12% weekly gain as shipping traffic slumped through the Strait of Hormuz, Nasdaq reported. The U.S. intensified strikes against Iran for a sixth straight day, hitting an oil tanker near the country’s main terminal overnight.

Dallas Federal Reserve President Lorie Logan called for “modestly” higher interest rates on Thursday, arguing that inflation remains far above the Fed’s 2% target, according to Nasdaq. She warned that without policy action, inflation could become more entrenched, requiring more severe rate hikes later.

Netflix added to the cautious mood, forecasting third-quarter revenue and earnings that fell short of Wall Street estimates, Nasdaq said. SpaceX called off Thursday’s Starship mega rocket launch after some engines failed to ignite.

Crypto hit across the board

The risk-off wave swept through digital assets. Bitcoin fell 2% to about $63,400, failing twice at $65,000, CoinDesk reported. It later recovered to near $64,000, according to Investing.com, but the rebound lacked strength. Ethereum dropped 4% to $1,850, underperforming bitcoin despite nearly $97 million in inflows into U.S. spot ether ETFs this week, most of it into BlackRock’s funds, CoinDesk noted. Hyperliquid’s HYPE fell 10% to $60, its steepest weekly drop since June.

Bitcoin briefly slipped below $63,000 before recovering, Piyush Walke, Derivatives Research Analyst at Delta Exchange, told The Economic Times. He said the broader downtrend remained intact as the price failed to form higher highs and slipped back below the 50-day moving average.

Nischal Shetty, founder of WazirX, described the week as volatile but constructive, with a bounce after softer-than-expected U.S. inflation data eased concerns about further rate hikes, The Economic Times reported. However, markets remain cautious ahead of fresh macroeconomic signals and regulatory clarity, he added.

The Fear and Greed Index sat at 25, deep in “extreme fear” territory, CoinDesk said. Wintermute’s OTC desk described the week as “consolidation under resistance rather than continuation,” noting spot volumes fell rather than rose into the highs. Glassnode’s onchain metrics have yet to confirm a reversal.

Bitcoin spot ETFs are on track for modest outflows this week after ending an eight-week streak of heavy outflows last week, Walke added.

The sell-off began in semiconductors and spread to every major cryptocurrency, with investors questioning whether the AI rally had run ahead of fundamentals. The answer, for now, is arriving in the chip tape rather than onchain data.