AI stocks slip and global markets retreat as oil hits five-month high
Major technology indices experienced significant declines, with the Nasdaq composite down 2.4% and S&P 500 down 1.3%, driven primarily by weakness in AI-related equities. Investors are concerned about the sustainability of high valuations amid rising capital costs for building data centers and purchasing AI chips. Despite fundamentals remaining solid—semiconductor equipment maker Lam Research reported better-than-expected Q3 results—its stock fell 11.1% after issuing a cautious forward guidance, reflecting market sensitivity to any signs of deceleration.
Key points
- Nasdaq composite dropped 2.4% amid AI stock selloff
- Concerns over expensive financing for data centers and AI chips
- Lam Research fell 11% despite beating profit expectations
- Oil prices hit five-month highs due to Iran conflict concerns
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