By Zoey
Global financial markets came under renewed pressure on Thursday as investors continued selling technology stocks tied to the artificial intelligence boom while growing geopolitical tensions in the Middle East pushed oil prices higher and added to uncertainty across global markets.
U.S. equities delivered a mixed performance during trading, with the technology-heavy Nasdaq Composite falling 0.5% as weakness in semiconductor and AI-related companies offset gains elsewhere in the market. The broader S&P 500 slipped 0.2%, while the Dow Jones Industrial Average managed to rise by 146 points, supported by gains outside the technology sector.
Chipmakers and memory manufacturers led the market decline for a second consecutive session as investors took profits following a remarkable rally that has driven many AI-related stocks sharply higher throughout the year.
Among the biggest decliners were Western Digital and Sandisk, both of which suffered steep losses during early trading. Micron Technology also moved lower, while Intel extended recent declines as investors reassessed valuations across the semiconductor industry.
Many of the companies at the center of the artificial intelligence boom have seen their share prices double or even triple since the beginning of 2026, fueled by expectations that AI will transform industries ranging from cloud computing and software development to healthcare and manufacturing. However, analysts say some investors are becoming increasingly concerned that stock prices may have risen faster than the pace of actual earnings growth.
Market participants continue to debate whether the enormous investments being made in artificial intelligence infrastructure will generate the long-term profits necessary to justify current market valuations. While optimism surrounding AI remains strong, recent trading suggests investors are becoming more selective as they evaluate the sector’s future growth prospects.
Meanwhile, geopolitical developments continued to influence global markets. Oil prices remained elevated as military tensions between the United States and Iran intensified, raising concerns about possible disruptions to energy supplies in one of the world’s most strategically important regions.
Brent crude, the international benchmark for oil prices, climbed approximately 1.1%, extending gains recorded since the conflict escalated. U.S. benchmark crude oil also remained at significantly higher levels than earlier this year, reflecting ongoing fears that instability in the Middle East could disrupt global oil shipments and increase energy costs worldwide.
Higher oil prices have renewed concerns about inflation, as rising fuel costs often increase transportation and manufacturing expenses, potentially placing additional pressure on consumers and businesses.
In the bond market, U.S. Treasury yields moved higher as investors adjusted expectations for future economic growth, inflation, and monetary policy. Rising yields generally reflect expectations that interest rates could remain elevated for longer if inflation proves more persistent.
European stock markets also traded lower, with major indexes across the region posting declines as investors reacted to weakness in technology shares and continued geopolitical uncertainty.
Asian markets experienced some of the steepest losses of the day, particularly in South Korea, where the Kospi Index plunged 6.4%. The sharp decline was driven by heavy selling in major technology companies, including memory chip manufacturers SK Hynix and Samsung Electronics, both of which recorded significant losses.
The decline in South Korean equities was also influenced by the Bank of Korea’s decision to raise interest rates, its first increase since 2023. Policymakers cited inflation risks associated with higher global energy prices and ongoing geopolitical tensions as factors supporting tighter monetary policy.
Japan’s stock market also retreated as semiconductor-related companies faced broad selling pressure. Shares of Kioxia, Tokyo Electron, Advantest, and SoftBank Group all posted notable declines, contributing to a sharp drop in the Nikkei 225 index.
Taiwan’s stock market finished little changed despite continued volatility in global semiconductor shares.
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip manufacturer, gained ground ahead of its earnings release. The company later announced record quarterly earnings, raised its revenue growth outlook, and unveiled plans to invest an additional $100 billion to expand semiconductor manufacturing capacity in the United States.
The strong results from TSMC provided some support for technology stocks in Europe, where Dutch semiconductor equipment manufacturer ASML recorded modest gains as investors welcomed signs of continued strength in global chip demand.
Elsewhere in Asia, Hong Kong’s Hang Seng Index outperformed regional markets, rising 1.3%. Technology giant Alibaba advanced after Chinese regulators approved Apple’s artificial intelligence platform for use in China, with Alibaba confirming that its Qwen large language model will be integrated into Apple’s AI services for Chinese users.
Mainland China’s Shanghai Composite Index moved lower, while Australia’s benchmark stock index finished little changed. India’s Sensex edged slightly higher, outperforming several other major regional markets.
Investors are also awaiting additional U.S. economic data, including the latest retail sales figures, which are expected to provide further insight into consumer spending and the strength of the American economy.
The combination of corporate earnings, inflation trends, geopolitical developments, and continued investment in artificial intelligence is likely to remain the primary driver of global financial markets in the weeks ahead as investors assess both opportunities and emerging risks.
Original article
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