Asian shares sink, with Tokyo down more than 5% as slumping AI stocks drag world markets lower

Japan's Nikkei 225 fell 4% to 64,141.12, while Taiwan's markets dropped 6.5% after TSMC announced a $100 billion expansion of U.S. fabrication plants, sending TSMC shares down 7.3%. AI and chip stocks faced heavy selling across Asia and Europe, with Tokyo Electron down 8.2%, Advantest down 7.2%, SoftBank down 9%, and Nvidia down 2.4% in the U.S., as investors worry about unsustainable valuations and whether AI profits will match demand.

Why it matters: Oil prices surged as U.S. airstrikes against Iran intensified over the Strait of Hormuz, while European markets were mixed—Germany's DAX fell 0.3% and the FTSE 100 rose 0.4%—and U.S. futures pointed to further declines.