Global Markets Slide as Wall Street Rout Spreads, AI Concerns Shake Equities and Volatility Hits Crypto and Metals

BY COMFORT OGBONNA

Global markets pulled back on Friday as a sell-off that began on Wall Street rippled across regions, dragging equities lower and injecting fresh volatility into cryptocurrencies and precious metals. Investor nerves were rattled by mounting concerns over artificial intelligence, with fears about both the disruptive impact of AI and the soaring costs tied to its expansion weighing heavily on risk appetite.

The MSCI All-Country World Index recovered from earlier session lows to trade flat, but it remained on course for its weakest weekly performance since mid-November, down around 1.6% for the week. The hesitant tone reflected growing unease among investors as uncertainty surrounding the AI boom collided with broader worries about economic resilience and corporate profitability.

Market anxiety has been fuelled by projections that technology giants including Amazon, Microsoft, Google and Meta could spend a combined $600 billion on artificial intelligence this year. While the spending underscores the strategic importance of AI, it has also intensified concerns about whether such massive investments will generate adequate returns, particularly as disruption threatens parts of the software and data services sectors. Analysts said the market has become increasingly sensitive to every new development tied to AI, amplifying price swings.

Wall Street set the tone after stocks fell for a third consecutive session on Thursday. The S&P 500 slipped into negative territory for the year following survey data showing that layoffs announced by U.S. employers surged in January to the highest level for that month in 17 years, raising fresh doubts about the strength of the U.S. economy. Losses were especially pronounced in technology-linked segments, where the S&P 500 software and services index plunged 4.6% in a single session, erasing roughly $1 trillion in market value since late January in what traders have dubbed a brutal sector-wide unwind.

The pullback quickly spilled into global markets. European shares eased, with the pan-European Stoxx 600 slipping modestly, while Asian markets weakened more sharply. MSCI’s broad index of Asia-Pacific shares outside Japan fell 0.7%, extending losses for a second straight session. U.S. stock futures showed tentative stabilization, with S&P 500 e-mini futures edging slightly higher and Nasdaq futures holding steady, suggesting a fragile pause rather than a decisive rebound.

Japan was an exception, with stocks rising as the Nikkei 225 gained 0.8%, supported by local factors ahead of Sunday’s election. Elsewhere, however, investors continued to rotate away from high-growth technology names toward more defensive areas of the market, such as consumer staples, highlighting a shift toward caution.

Speculative assets remained under pressure, even as they attempted to steady after sharp declines. Cryptocurrencies managed to halt a bruising sell-off following a wipeout on Thursday, but the broader damage remains severe. The global crypto market has lost roughly $2 trillion in value since October. Bitcoin rose 2.9% to $64,916.60 after earlier sliding nearly 5% to around $60,000, while ether climbed 1.64% to $1,877.51, recovering part of its earlier losses. Analysts noted that digital assets often come under strain during risk-off periods, and the current environment has been no exception.

Precious metals also experienced extreme swings, challenging their traditional role as safe havens. Silver rebounded 3.3% to $73.57 after plunging as much as 10% earlier in the session, while gold rose 1.6% to $4,846.88 after having dropped more than 2%. The sharp volatility has prompted investors to reassess the defensive qualities of these assets, particularly amid heavy speculative positioning and leveraged trades.

Attention also turned to U.S. monetary policy, where expectations are beginning to shift. Markets are increasingly pricing in the possibility of a Federal Reserve rate cut at its next meeting, although most still expect policymakers to hold rates steady. Futures markets indicate a rising probability of a 25-basis-point cut at the meeting ending March 18, reflecting growing concern about economic momentum. The U.S. dollar softened slightly, with the dollar index down 0.1%, as rate-cut bets weighed on the currency.

In commodity markets, oil prices bucked the broader risk-off trend, with Brent crude climbing 1% to $68.26 a barrel, supported by supply considerations and geopolitical factors. Even so, analysts cautioned that broader market volatility could continue to spill into energy markets if risk aversion deepens further.

Overall, the week underscored just how fragile investor sentiment has become. With AI optimism giving way to questions about cost, payoff and economic impact, markets appear increasingly vulnerable to sharp swings as traders reassess risk in a rapidly changing global landscape.