Stocks linked to artificial intelligence (AI) fell sharply on Thursday, dragging stock markets across the world lower. At the same time, oil prices climbed to their highest level in five months as investors worried about the war involving Iran and its impact on global energy supplies.
The S&P 500 fell 1.4%, while the Nasdaq Composite dropped 2.2% as of 10:45 a.m. The Dow Jones Industrial Average fell by a smaller 0.6%, or 295 points.
The bigger losses in the Nasdaq reflected the pressure on technology stocks, while companies outside the tech sector performed better, according to AP. Eastern time on Thursday.
The sell-off in AI and technology stocks began in Asia before spreading to other markets. Concerns about high government debt are affecting many developed economies, including the United States . Thursday’s market movement showed the difference between technology stocks facing high spending costs and valuation concerns, and other businesses reporting strong profits.
South Korea’s Kospi fell 3.5%, Hong Kong’s Hang Seng Index dropped 3%, and Japan’s Nikkei 225 declined 2.7%. Because their stock indexes have large holdings in AI and other technology companies, according to AP, asian markets were hit particularly hard.
In the US, high inflation, signs of a strong economy and other economic pressures have helped push government bond yields to levels not seen in decades, according to AP. rising oil prices, fears about the Iran war, government debt and uncertainty over AI spending have kept investors cautious, according to AP While a relatively strong US economy has supported company earnings.
Nvidia, the world’s leading maker of AI chips, saw its shares fall 3.8% as investors sold technology stocks. Nvidia is the largest company on Wall Street by total market value, so its share price has a major influence on the S&P 500. Lam Research, which makes equipment and provides services used in semiconductor manufacturing, reported higher revenue and profit for the summer quarter.
Because its profit forecast for the final three months of 2026 was weaker than expected at the midpoint of its projected range, according to AP, however, its shares fell 9.7%. Both figures were slightly better than analysts had expected. The move comes as the company continues to spend on artificial intelligence, even though investors are becoming more concerned about the costs of developing and expanding AI technology.
Meta said it was creating a new class of stock to raise money for its AI investments and other expenses. Its decline became one of the biggest reasons for the index’s fall on Thursday, according to AP.
