Markets Stumble as AI Fears Trigger Global Sell-Off
So, let’s talk about what’s happening in the stock market today, because things have taken quite a sharp turn — and not in the way many investors were hoping. Even though a wave of strong business updates was supposed to calm nerves, the opposite reaction has been unfolding across global markets.
In the US, the day had actually started on a positive note. There was an early rally, powered by upbeat earnings from Nvidia and Walmart, solid hiring numbers for September, and even a slight rise in home sales. Under normal circumstances, this combination would’ve boosted confidence. But instead, the rally faded quickly, and by the end of Thursday’s session, all three major US stock indexes had slipped back into the red. The S&P 500 closed down about 1.5%, the Dow dropped nearly 0.8%, and the Nasdaq took the biggest hit with a loss of more than 2%.
What’s interesting is that Nvidia, which initially shot up during morning trading, ended the day more than 3% lower. That reversal sparked a lot of questions. As analyst James Stanley put it, the market ended up doing the exact opposite of what should have happened — and that disconnect is raising eyebrows.
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A big part of this shift is tied to the growing worry that we might be in the middle of an AI bubble. Colleen McHugh from Wealthify pointed out that November has been particularly rough for the Nasdaq, and concerns about inflated AI valuations simply haven’t gone away. Even Bitcoin slipped below $90,000, hitting its lowest level since April, partly because of those same fears.
Now, Nvidia’s CEO Jensen Huang has already brushed off suggestions that AI companies are overvalued, insisting that demand remains strong and the long-term outlook is solid. And yes, Nvidia’s blockbuster results did give markets a brief lift. But Wall Street still seems uneasy, and those concerns have been spreading across Asia as well.
By Friday, major Asian markets were in decline. Japan’s Nikkei fell 2.4%, with SoftBank plunging nearly 11%. South Korea’s Kospi dropped 3.8%, weighed down by big losses in SK Hynix and Samsung, while Hong Kong’s Hang Seng also slid around 2%.
Even tech leaders themselves are adding nuance to the conversation. Alphabet CEO Sundar Pichai recently talked about some “irrationality” in the current AI wave. At the same time, analysts from Oxford Economics suggest that what we’re seeing might be less a crash and more a healthy correction — at least for now.
Adding to all this uncertainty is the question of where interest rates are heading. Inflation data was delayed by the US government shutdown, so investors don’t have a clear picture yet. And although the latest jobs report showed stronger-than-expected hiring, the unemployment rate ticked up slightly, leaving the outlook for Federal Reserve rate cuts in limbo.
So right now, markets are dealing with a mix of AI valuation worries, interest rate questions, and a sense that stocks had been priced for perfection. When that happens, even small doubts can lead to big swings — and over the past few weeks, many of those doubts have come rushing in.
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