International Markets Experience Significant Decline Amid AI Valuation Concerns
International financial markets plummeted on Tuesday evening as investors across the Asia-Pacific region expressed growing anxiety over the inflated valuations of artificial intelligence and technology enterprises.
The Kospi index in South Korea plummeted by over 6%. Japan’s Nikkei 225 average experienced a decline of approximately 4.5%, while Hong Kong’s Hang Seng index fell by more than 1%. Furthermore, stocks in Taiwan experienced a decrease of around 2.5%.
Just last week, the Kospi reached an unprecedented peak, propelled by substantial gains in AI stocks.
However, on Wednesday, technology stocks suffered the most severe setbacks throughout Asia, with shares of global electronics titan Samsung descending by 5.5%, and chip manufacturer SK Hynix plummeting by over 6%.
SoftBank, a key investor in AI enterprises, witnessed a staggering drop of more than 14%, erasing more than $30 billion from its market capitalization.
This considerable sell-off emerged following a robust day of trading in the United States that momentarily interrupted the recent global market resurgence. The S&P 500 concluded Tuesday with a decrease of 1.1%, while the Nasdaq tumbled by 2%, and the Russell 2000 fell by 1.8%.
Nvidia, the largest publicly traded corporation globally, experienced a nearly 4% decline on Tuesday. Palantir, another prominent AI firm specializing in government contracts, saw its shares drop by nearly 8%, despite surpassing Wall Street’s earnings forecasts.
Late Monday, the chief executives of Goldman Sachs and Morgan Stanley cautioned that a potential market retrenchment might be imminent.
This apprehension was exacerbated by disappointing earnings reports on Tuesday from Advanced Micro Devices and Super Micro Computer—companies that manufacture chips essential for AI technologies.
Excitement surrounding artificial intelligence and the associated firms has surged over recent months. Giants such as Amazon, Microsoft, and OpenAI have engaged in a series of multibillion-dollar agreements, leading to speculation regarding the industry’s sustainability and funding mechanisms.
U.S. stock futures, indicative of market sentiment ahead of the opening bell in New York, suggested that additional losses could transpire on Wednesday.
S&P 500 futures projected a decline of 0.5%, while Nasdaq futures indicated a downturn of approximately 1% for Wednesday.
European markets are also bracing for losses, with futures for Germany’s benchmark index signaling a drop of 1.2%, and major indexes in France and Britain anticipated to decline by over 0.5%.
Despite the current turbulence, U.S. stocks are still emerging from a remarkable upward trajectory, steadily reaching new record highs. Year-to-date, the S&P 500 maintains an increase of over 15%, while the Nasdaq Composite, which more closely tracks the largest technology firms, has surged by more than 20% this year.
Source link: Nbcnews.com.
