Global stock markets fell Friday as investors reacted to a deepening sell-off in artificial intelligence stocks and rising oil prices.

The S&P 500 fell 1% on Friday, marking its first losing week in three months as the artificial intelligence boom faced a period of profit-taking and scrutiny. Investors expressed concern that the massive capital spending on AI might not yield the promised productivity gains, leading to a significant slide in semiconductor stocks. Nvidia, a primary leader in the AI chip race, dropped 2.2%, briefly losing its position as the world's most valuable company to Apple. The tech-heavy Nasdaq composite sank 1.4%, while the Dow Jones Industrial Average dropped 406 points. Markets were further pressured by the announcement of Kimi K3, a new open-source AI model from Chinese startup Moonshot, which threatens to challenge the dominance of Western models like ChatGPT. Additionally, oil prices jumped as the United States expanded its airstrike campaign against Iran, raising fears of supply disruptions in the Persian Gulf. While tech stocks retreated, some investors began rotating into the financials sector as the market adjusted to cooling AI enthusiasm and potential interest rate hikes.

Sources