AI Stock Anxiety Sparks Worldwide Financial Rout
Financial markets across the globe are facing a severe downturn this Tuesday, driven by growing investor apprehension over the soaring valuations of artificial intelligence (AI) stocks. The wave of selling pressure that started on Wall Street has swept through Asia and Europe, indicating a broad-based retreat from risk.
Pre-Market Indicators Signal Further Losses
Before the opening bell in New York, futures pointed towards another difficult session. The S&P 500 was indicated down by 0.6%, while the Dow Jones and Nasdaq were both poised for a 0.7% decline. This follows three consecutive days of heavy losses, which have significantly impacted market sentiment.
The widespread nervousness was starkly illustrated by the CNN Fear & Greed Index. This key gauge, which monitors seven indicators including market momentum and stock price strength, plummeted to a reading of just 14 out of 100 by late Monday. A level this low is widely interpreted by analysts as signalling a state of 'extreme fear' amongst investors.
Tech and Chip Stocks Under Pressure
All attention is now fixed on Nvidia, the bellwether for the AI sector, which is scheduled to release its earnings on Wednesday. The chipmaker's stock fell another 1.1% in pre-market trading, adding to a 1.9% drop from the previous session. This leaves the company down 8.6% for the current month.
Other technology giants were also caught in the downdraft. Microsoft shares lost 1.5%, and Amazon declined by 1.8%. The sell-off extended to other major semiconductor firms, with Micron, Intel, and Qualcomm all slipping between 1% and 2%.
Global Domino Effect: From Asia to Europe
The negative sentiment hammered Asian markets overnight. Japan's Nikkei index plunged more than 3%, while South Korea's Kospi saw a steep 3.3% drop. Taiwan's Taiex fell 2.5%, and markets in Hong Kong, Shanghai, and Australia all finished the session lower.
Europe followed suit, with London's FTSE 100, Germany's DAX, and France's CAC 40 each down by approximately 1% to 1.5%. In other asset classes, Bitcoin dipped a further 1% to approximately $91,360, while the prices of gold and oil remained relatively steady amidst the equity turmoil.
