AI sell-off deepens as chip stocks slump in market retreat - business live

China's DUV Gambit Spooks the Tape

The trigger for the latest leg of the AI sell-off was a report from The Information that China has begun mass production of homegrown deep ultraviolet (DUV) chipmaking tools, according to the article. The market read this as a direct challenge to the global chipmaking equipment leaders who have so far dominated the supply chain for advanced semiconductors. Jing Jie Yu, an equity analyst at Morningstar, argued the reaction was "largely a knee-jerk reaction and overdone," but acknowledged investors are worried that China's progress could "threaten the competitive position of global chipmaking and chip equipment leaders." The fear is less about today's revenue and more about the long-term moat: if China can produce DUV tools at scale, the pricing power and margins of incumbents from the US, Netherlands, and Japan come under structural pressure.

Barclays Prints a Beat but Faces Political Heat

Barclays reported a 17% rise in pre-tax profit to £6.1bn for the first half of 2026, beating analyst expectations of £5.9bn. The bank's equities traders generated £1.26bn, up 45% year-on-year, and investment banking fees rose 32% to £747m. Even with higher credit impairment charges of £1.4bn, the bank announced a £1bn share buyback and raised its full-year income target. Matt Britzman, senior equity analyst at Hargreaves Lansdown, called the strategy "moving in the right direction" but noted the bank still has "more to prove against the scale of its US rivals." The TUC seized on the numbers to demand a higher bank surcharge, with general secretary Paul Nowak arguing that "big banks like Barclays are raking it in while working people and local businesses are struggling" amid rising energy costs linked to the war in Iran.

Inflation Watch: Unilever's Price Warning

Consumer goods giant Unilever offered a more sobering signal on the cost-of-living front, warning that "underlying price growth to accelerate in the second half as commodity-driven pricing continues to land in market." The FTSE 100 group reported better-than-expected second-quarter underlying sales up 5.8%, helped by both higher volumes and prices, but the guidance suggests more sticker shock for shoppers. Chief executive Fernando Fernandez called it "the best volume quarter at Unilever in over a decade" while flagging macroeconomic uncertainty. With oil prices volatile (Brent crude down 2.7% at $85.95 a barrel) and the war in Iran cited as a risk to energy bills, the story threads together corporate earnings, geopolitics, and household budgets in a single morning's tape.