NEW YORK — Global stock markets closed lower Friday as continued selling in artificial intelligence-related stocks combined with rising oil prices to dampen investor sentiment, highlighting growing concerns over technology valuations and escalating geopolitical tensions.
The S&P 500 fell 1% to finish at 7,457.69, marking its first weekly decline in three weeks and only its third weekly loss since late March. The Dow Jones Industrial Average dropped 406.55 points, or 0.8%, to 52,146.42, while the technology-heavy Nasdaq Composite slid 1.4% to 25,520.24.
AI Stocks Continue to Weigh on Markets
Semiconductor companies remained at the center of the market’s decline as investors reassessed expectations for artificial intelligence spending and the long-term demand for advanced chips.
Nvidia lost 2.2%, briefly surrendering its position as Wall Street’s most valuable publicly traded company before reclaiming the top spot by the closing bell.
Applied Materials fell 5.6%, while Micron Technology swung between gains and losses throughout the session before ending modestly lower.
The broader weakness reflected growing caution that the rapid rise in AI-related stocks may have outpaced expectations for future earnings and commercial adoption of the technology.
Asian Markets Mirror the Technology Sell-Off
The weakness extended across Asia, where technology-focused markets also recorded steep losses.
Taiwan’s benchmark index dropped 6.5%, Japan’s Nikkei declined 4%, and Shanghai fell 3%. Taiwan Semiconductor Manufacturing Co. lost 7.3%.
Investor confidence also weakened after news surrounding Chinese startup Moonshot’s Kimi K3 artificial intelligence model renewed concerns that lower-cost AI alternatives could intensify competition and reduce demand for premium semiconductor products.
European markets posted comparatively smaller declines, largely because technology companies account for a smaller share of the region’s major stock indexes.
Corporate Earnings Add to Investor Caution
Quarterly earnings reports also pressured Wall Street.
Netflix shares fell 7.3% after quarterly revenue narrowly missed analysts’ expectations, despite reporting stronger-than-expected profit. The company’s outlook for the current quarter also disappointed investors.
Medical technology company Intuitive Surgical dropped 14.1%, even after exceeding earnings forecasts, as investors questioned whether procedure growth could slow in the coming quarters.
SpaceX shares fell 5.4%, extending recent losses after the company aborted a Starship test flight shortly before liftoff on Thursday. Investors also continued to monitor volatility surrounding Elon Musk’s artificial intelligence ventures.
Rising Oil Prices Renew Inflation Concerns
Energy markets added another source of pressure.
Brent crude, the international benchmark, climbed 4.6% to settle at $88.10 per barrel after trading near $76 only a week earlier.
The increase followed renewed military operations involving the United States and Iran, raising concerns that further disruption to shipping through the Strait of Hormuz could tighten global oil supplies.
Higher energy prices could increase inflationary pressures, raise borrowing costs and slow economic growth, adding another challenge for investors already navigating uncertainty in technology markets.
Treasury Yields Edge Lower
Despite renewed inflation concerns, U.S. government bond yields eased slightly.
The yield on the benchmark 10-year Treasury note slipped to 4.55% from 4.57% the previous day.
Meanwhile, new economic data showed U.S. consumer sentiment improved by more than economists had expected, while inflation expectations moderated.
Those figures remain closely watched by the Federal Reserve as policymakers evaluate the outlook for inflation and future interest rate decisions.
Markets Face Multiple Headwinds
Friday’s losses reflected two of the biggest forces shaping financial markets: growing skepticism over elevated AI valuations and rising geopolitical risks that have pushed energy prices higher.
With investors awaiting another round of corporate earnings, economic indicators and developments in the Middle East, analysts expect market volatility to remain elevated in the weeks ahead.
Article Topics: Global Markets | Stocks | Artificial Intelligence | Nvidia | SpaceX | Oil Prices | Federal Reserve | Investing
This report is based on reporting by The Associated Press.
Article Topics: Global Markets | Artificial Intelligence | Nvidia | Oil Prices | Iran Conflict | Stock Market | Semiconductors | Federal Reserve
