World stocks fall in semiconductor rout; oil rises on Middle East escalation

Global equity indexes tumbled on July 17 as semiconductor stocks plunged for a third consecutive day, with the Philadelphia semiconductor index now 23.5% below its record high, driven by concerns over rich tech valuations and AI spending sustainability. Oil prices surged as US-Iran tensions escalated, with the US striking bridges and an airport in Iran and Iran retaliating by hitting a power and desalination plant in Kuwait, further disrupting energy supplies through the Strait of Hormuz.

Why it matters: Asian markets led the selloff with Taiwan down over 6% and Japan's Nikkei tumbling 4%, while defensive assets including government bonds, utilities, and gold rallied as the VIX jumped 6.6%.