Global stocks tumble as AI sector sell-off deepens and oil prices rise

Global financial markets faced a turbulent conclusion to the week on Friday, as a deepening sell-off in the technology sector combined with a sharp climb in crude oil prices to pull major indices lower. The retreat among companies central to the artificial intelligence boom reflects growing investor skepticism regarding the sustainability of high valuations and the potential for future profit margins in the sector.

The S&P 500 fell 1% to finish its first losing week in the last three and only its third since the end of March. European stock indexes, which have less of an emphasis on AI and tech, had milder moves. Indexes tumbled 6.5% in Taipei, 4% in Tokyo and 3% in Shanghai as stocks like Taiwan Semiconductor Manufacturing Co. Dropped 7.3%.

The Nasdaq composite sank 1.4%. Chip stocks and other AI darlings once again were at the center of the shaky trading. They’ve been under pressure for weeks on worries that their prices shot too high and that voracious demand for computer memory and processors may be unsustainable if AI ends up producing less profit and productivity than promised. News of a powerful Chinese AI model by startup Moonshot, Kimi K3, further shook markets. Similar to when China’s DeepSeek announced its AI model in early 2025, another low-cost rival to big Western AI models like ChatGPT and OpenAI could potentially hurt demand for computer chips and other components.

Oil price volatility

The price for a barrel of Brent crude, the international standard, jumped 4.6% to settle at $88.10, up from roughly $76 a week ago. The United States expanded its airstrike campaign against Iran early Friday by hitting more bridges and collapsing a tower at a key Iranian port. That raised further worries about whether oil tankers will be able to use the Strait of Hormuz to carry crude from the Persian Gulf to customers worldwide.

A report suggested sentiment among U.S. Consumers is improving more than economists expected, while expectations for upcoming inflation eased. That’s important for the Federal Reserve, which is considering hikes to interest rates to keep a lid on inflation.

Key market movements and reports

Adding to the pressure on Wall Street were drops for several stocks following their latest earnings reports. Companies are under pressure to deliver big growth for the spring to justify the big moves upward their stock prices have already made.

• Netflix: Netflix sank 7.3% after its revenue for the latest quarter fell just short of analysts’ expectations, even though its profit was bigger than expected.
• Intuitive Surgical: Intuitive Surgical, a maker of robotic surgical systems, dropped 14.1% despite topping expectations for the latest quarter. Analysts pointed to worries about slowing procedure growth because of the expiration of enhanced tax credits that helped lower the cost of health insurance for many Affordable Care Act enrollees.
• SpaceX: Elon Musk’s SpaceX fell 5.4% and touched its lowest level since its stock began trading on the Nasdaq just over a month ago. The owner of the xAI business has been swept up in the swings for AI stocks, and it also had to abort a test flight of its mega Starship rocket Thursday within a second or so from blasting off.
• Nvidia: Nvidia was the heaviest weight on the S&P 500 after dropping 2.2%. Its recent losses forced it to briefly cede the No. 1 ranking as the most valuable company on Wall Street Friday, but it finished the day back above Apple.

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