Global stocks edge lower as AI and rate fears hit tech

Global stocks edged lower on Thursday as concerns over artificial intelligence (AI) spending and the possibility of further interest rate hikes fueled a sell-off in technology and chip stocks. Investors grew wary of valuations within the AI sector, with increasing skepticism about the long-term demand for data centers. On Wall Street, the tech-heavy Nasdaq and the Philadelphia SE Semiconductor index both fell by around 2 percent. However, the S&P 500 recovered some ground in early trading, buoyed by gains in healthcare and materials stocks. The Dow Jones Industrial Average rose approximately 1 percent. In Europe, the CAC 40 in Paris gained 0.8 percent, while the DAX 40 in Frankfurt rose 0.3 percent. In Frankfurt, semiconductor firm Infineon dropped 4.8 percent, and Siemens Energy, which supplies power solutions to data centers, fell 2.6 percent. Asian markets faced a brutal tech-led sell-off. South Korea's KOSPI index, known for its concentration of top chipmakers, plummeted nearly 8 percent. Meanwhile, Japan's Nikkei 225 fell close to 5 percent. Rong Ren Goh, a portfolio manager at Eastspring Investments, noted that the sell-off reflected investor caution toward the more vulnerable segments of the AI ecosystem. He stated that markets increasingly questioned the sustainability and trajectory of demand for computing capacity, exacerbated by higher funding costs. In London, the FTSE 100 outperformed global counterparts, rising 1.1 percent to 10,840. This gain was attributed to favorable domestic economic data and lower bond yields, along with reduced exposure to volatile technology stocks. Experian, a credit checking firm, led the FTSE 100 risers, climbing 5.9 percent. Telecoms firm BT rose 4.3 percent, and accountancy software provider Sage increased 5.6 percent. JD Sports Fashion also climbed 4.3 percent after hosting analysts in Orlando. Computacenter, which benefits from robust data-center spending, led the decline on the FTSE 100, falling 5.6 percent. Technology-focused trusts Polar Capital Technology and Scottish Mortgage Investment Trust also declined, by 4.7 percent and 1.2 percent respectively. Antofagasta, a London-based miner focusing on Chile, fell 4.1 percent after reporting lower-than-expected third-quarter output and revised 2027 guidance. The company expects copper production in 2027 to range between 630,000 and 690,000 tonnes, below the previously anticipated 692,000 tonnes.