Global Markets Slide as AI Spending Concerns Trigger Tech Selloff
Global stock markets declined as investors questioned the returns on artificial intelligence infrastructure spending ahead of key earnings reports from Meta and Tesla, Inc.
Global markets experienced significant volatility as investors questioned the sustainability of artificial intelligence valuations and the high cost of financing infrastructure. Following a week where the NASDAQ Composite fell 4.5% and the S&P 500 dropped nearly 2%, investors shifted focus to the debt levels of neocloud firm CoreWeave, which saw its stock price decline by as much as 30%. Despite reassuring comments from Nvidia CEO Jensen Huang, anxiety over AI returns led to Monday declines in Japan's Nikkei, Taiwan's market, and South Korean shares.
Market attention is now centered on upcoming earnings reports from Meta and Tesla, Inc., as well as a pending interest rate decision from the Federal Reserve System following high U.S. inflation data. Goldman Sachs estimates that five major AI hyperscalers could increase combined capital expenditure to $1.2 trillion next year.
In other developments, Brent crude futures fell after President Donald Trump waived sanctions and tariffs on Russia, though he later stated a final decision was still pending. Meanwhile, the euro declined amid cost-of-living protests in France, which President Emmanuel Macron described as involving "unbridled" violence. These losses occurred despite the Government of China reporting third-quarter GDP growth of 4.5%, slightly exceeding market expectations.
