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Sharp drops for AI stocks overwhelm markets worldwide as oil prices jump
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- DeepHorus
A sharp selloff in artificial-intelligence stocks dragged global markets lower on Thursday, while oil prices surged on worries about the war with Iran. The S&P 500 fell 1.2% for its worst day since July, and the Nasdaq composite tumbled 2.6%. The Dow Jones Industrial Average added 11 points.
Tech weakness masked strength in the broader U.S. market, where most stocks rose. AI shares have swung on concerns that borrowing to build datacenters and buy AI chips has become too expensive. Investors also worry valuations shot too high during a years-long frenzy, even as companies report growth.
Lam Research reported slightly stronger summer profit and revenue than analysts expected, yet its stock tumbled 11.8%. Meta Platforms lost 7% after beating revenue forecasts but missing on profit; it announced a new stock class to fund AI investments. Tesla fell 3.1% after a stronger profit but weaker revenue.
Nvidia dropped 4.4%, the strongest drag on the S&P 500 as Wall Street’s largest company by value. CoreWeave, which borrows to buy Nvidia chips for cloud rental, fell 10.1% amid debt worries. In Asia, South Korea’s Kospi fell 3.5%, Hong Kong’s Hang Seng dropped 3%, and Japan’s Nikkei 225 sank 2.7%.
Europe’s CAC 40 fell 1.4% on rising French bond yields and debt concerns. Oil added stress: Brent crude jumped 4% to $113.17 a barrel after a five-month high, up from less than $97 at the start of the month. The jump reflects uncertainty over when the Iran war will allow energy markets to normalize.
In a flight to safety, the U.S. 10-year Treasury yield fell to 4.97% from 5.13% late Wednesday, even as data suggested fewer workers applied for unemployment benefits. Investors are likely to remain focused on AI profitability, borrowing costs, and oil-driven inflation. With valuations still elevated, further AI swings could keep global markets volatile.
