- 10 August 2026
How the AI trade unwind reshaped global equity markets in July
- PROFESSIONAL INVESTORS
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- 10.08.26
July saw a sharp divergence in global equity markets as investors rotated out of AI-related positions, with semiconductor stocks recording their steepest monthly losses since the Global Financial Crisis. The move was driven by questions over AI valuations and whether high capital expenditure programmes can be sustained from free cash flow.
The rotation benefited sectors and regions with lower technology exposure. Energy led US sector performance, European equities gained on defence and energy strength, and UK equities posted their best month since February. In emerging markets, South Korea bore the brunt of the unwind, falling around 23%, while Hong Kong-listed tech and e-commerce names outperformed mainland Chinese shares.
The full analysis sets out which earnings results accelerated the rotation, how eurozone GDP data shifted the macro backdrop, and what the shift in sector leadership could mean for portfolio positioning.
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