Global equity markets fell on Thursday as concerns about artificial intelligence spending and higher interest rates fuelled a continued selloff in technology and chip stocks, according to Reuters.
On Wall Street, the tech-heavy Nasdaq slipped, while the Philadelphia SE Semiconductor index was down. The S&P 500 reversed early losses and closed slightly higher, led by healthcare and materials stocks, while the Dow rose. The moves followed a brutal tech-led selloff in Asia.
In Asia, South Korea's Kospi index fell 7.7%, with Samsung Electronics down 9.5% and memory chipmaker SK Hynix down 11.4%, according to AP. Japan's Nikkei 225 fell 4.8%, with OpenAI investor SoftBank down 9.4%. The declines followed losses on Wall Street on Wednesday, when the Nasdaq fell 1.9% as AI-related stocks dropped, with Nvidia down 3.2%, Broadcom down 3.1% and AMD down 5.7%.
Investors have grown uneasy about valuations across the AI ecosystem and about whether demand for data centres can sustain the pace of spending, Reuters reported. Data-centre operator CoreWeave, which is heavily indebted, fell further after a sharp drop on Wednesday. Higher bond yields have raised borrowing costs for capital-intensive AI infrastructure projects.
A Reuters analysis said the market selloff is forcing companies driving the AI boom to delay fundraising plans or pay more for capital, as investors demand proof they can absorb rising rates and computing-power costs. The analysis said listings for a Blackstone-backed AirTrunk REIT, Nvidia-backed Firmus and SoftBank-backed SB Energy had been pulled or paused in the past week. The analysis also said deal activity could still hold up, with investors becoming more selective about valuations, leverage and business models.
The AP report linked the Asian selloff to hotter-than-expected US inflation data. The US reported that the consumer price index rose 3.7% year-on-year in September, up from 3.4% in August and worse than economists had expected. Markets are now watching whether AI spending can generate returns that justify the scale of investment.