Global stock markets experienced a significant decline on Friday, driven by growing concerns over an artificial‑intelligence bubble and a tech‑sector selloff. The Nasdaq, heavily weighted with technology stocks, fell by nearly two percent, while shares of Nvidia, the world’s leading AI chip designer, dropped more than four percent. This downturn in tech stocks has sparked fears that the recent rally—fueled by massive AI investments—may be ending, and analysts warn that valuations could be too high, prompting a market correction. “It’s one thing for equity markets to suffer a general pullback, but it’s quite another to see stocks at the vanguard of AI development getting trashed,” said David Morrison, an analyst at Trade Nation.
The selloff was also fueled by weak economic data. U.S. consumer sentiment fell to its lowest level since mid‑2022, with the University of Michigan’s index dropping six percent this month to a preliminary reading of 50.3, down from October’s 53.6. A report from outplacement firm Challenger, Gray & Christmas showed U.S. layoffs reaching the highest level in 22 years last month. In addition, the ongoing U.S. government shutdown has added to market uncertainty, forcing investors to rely on private data to gauge the economy’s health. The shutdown has led to the cancellation of hundreds of flights and has put pressure on the Federal Reserve to cut borrowing costs.
Global markets were further affected by China’s export data, which showed a decline in October for the first time in eight months, reflecting continued trade‑tension pressures. In London, the FTSE 100 was dragged down by double‑digit falls in the share prices of online property business Rightmove and British Airways owner IAG after earnings updates fell short of expectations.
As of 16:40 GMT, major indices posted significant declines: the Dow, S&P 500, and Nasdaq Composite in New York, the FTSE 100 in London, and the Nikkei 225 in Tokyo. Meanwhile, the euro and pound sterling rose against the U.S. dollar, and oil prices edged up slightly. The broad market drop underscores growing concerns over the tech sector and the potential for a correction. Investors will continue to monitor economic data, trade tensions, and the next steps of the Federal Reserve and other central banks. With the U.S. government shutdown showing no signs of ending, market uncertainty is likely to persist, and investors will be looking for signs of stability in the coming days.
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