European equity markets slumped sharply after a Wall Street sell-off on Thursday spread to Asia on Friday and then reached London, where trading approached the steepest single-day loss since March. The FTSE 100 fell 207 points, about 1.9%, to 10,575 in mid-morning trading. Germany’s DAX and France’s CAC 40 each dropped 1.9% and 1.5% respectively, while Spain’s IBEX lost roughly 1.1%.
Chief investment strategist Susannah Streeter of Wealth Club said the tech sell-off intensified, with the pain from Wall Street carried straight through to Asia and denting European sentiment. Chip makers led the decline, as memory-chip producer SanDisk tumbled 22% and hard-drive maker Western Digital fell 17%. Meanwhile, the VIX, Wall Street’s fear gauge, surged 61% to its highest level since the early weeks of the Iran war, underscoring heightened volatility.
Asian markets mirrored the downturn on Friday, with Japan’s Nikkei 225 sliding 6% and South Korea’s Kospi plunging more than 8%. IG chief market analyst Chris Beauchamp warned that the brutal session represented a dramatic reversal from the previous day, but noted that lingering AI-related concerns could trigger further selling pressure. The rapid spread of the sell-off across time zones highlights how investor sentiment toward artificial-intelligence investments remains fragile.
Despite the sharp corrections, most major indices remain in positive territory for the year. The Nasdaq Composite is up 4.6% since January, although it sits more than 10% below its recent peak. The FTSE 100 has risen almost 6.9% in 2026 but still trails the July record by over 300 points. Jefferies economist Mohit Kumar cautioned that a swift rebound is unlikely, yet he does not view the episode as the start of an AI trade unwind.
The sell-off also rippled through commodities, with copper on the London Metal Exchange poised for its biggest weekly decline since March. Benchmark three-month copper fell 0.61% and is set for a 2.79% weekly drop. CRU principal analyst Craig Lang said the metal’s price is increasingly tied to AI market dynamics and sentiment around data-centre expansion, linking the broader equity turmoil to the semiconductor supply chain.