World shares mixed after sharp Wall Street losses on AI-related worries

Global Markets Mixed as AI Concerns Trigger Tech Sell-Off

Global markets delivered a mixed performance Friday as investors grappled with concerns that artificial intelligence disruptions could undermine technology companies’ future prospects, following sharp losses on Wall Street.

In early European trading, Germany’s DAX inched up less than 0.1% to 24,860.94, while Britain’s FTSE gained 0.2% to 10,424.39. France’s CAC 40 moved in the opposite direction, slipping 0.2% to 8,323.44. U.S. futures suggested a continuation of Thursday’s downward trend, with S&P 500 futures dipping less than 0.1% and Dow Jones Industrial Average futures down 0.1%.

Asian markets broadly declined, with Tokyo’s Nikkei 225 falling 1.2% to 56,941.97. Despite reporting a $1.6 billion quarterly profit on Thursday, AI-focused SoftBank Group plummeted 8.9%, highlighting investor anxiety about the technology sector. South Korea’s Kospi decreased 0.3% to 5,507.01, although the country’s largest company, Samsung Electronics, managed to rise 1.5%.

Hong Kong’s Hang Seng index dropped 1.7% to 26,567.12, while the Shanghai Composite index retreated 1.3% to 4,082.07. Australia’s S&P/ASX 200 fell 1.4%, and India’s Sensex declined 1.1%.

The pessimism followed Wall Street’s significant losses on Thursday, when the S&P 500 recorded its second-worst day since Thanksgiving, dropping 1.6% to 6,832.76—though still near last month’s all-time high. The Dow Jones Industrial Average lost 1.3% to 49,451.98, while the tech-heavy Nasdaq composite declined 2% to 22,597.15.

American technology giant Cisco Systems faced a 12.3% drop despite posting better-than-expected quarterly results, as investors expressed concerns about its long-term profitability. Similarly, technology company AppLovin plunged 19.7% amid fears that artificial intelligence advancements could undermine its business model, overshadowing its strong quarterly profits.

These sharp declines reflect growing anxiety about how AI disruptions might reshape various industries. Many investors are questioning whether the massive investments companies are making in artificial intelligence will deliver adequate returns. Analysts suggest these uncertainties around AI disruption risks could persist for some time, creating ongoing market volatility, especially for software stocks.

However, not all market observers share this pessimistic outlook. Economists at Capital Economics remain bullish on the AI-driven rally, predicting a “good year” for the S&P 500. “Our sense remains that a sustained reversal of tech outperformance would require a big slide in tech itself,” wrote Thomas Mathews, head of markets for Asia Pacific at Capital Economics. “We think tech will fare very well.”

Outside the technology sector, some U.S. stocks demonstrated resilience. McDonald’s rose 2.7% after reporting stronger-than-expected profits, while Walmart gained 3.8%.

Meanwhile, investors and economists are closely monitoring upcoming U.S. inflation data scheduled for release Friday. This report could significantly influence the Federal Reserve’s approach to interest rates in the coming months. Some economists suggest the likelihood of another rate cut remains low for the near term.

In commodities markets, U.S. benchmark crude oil slipped 0.1% to $62.75 a barrel, while Brent crude, the international standard, decreased marginally to $67.46 per barrel. Precious metals showed strength, with gold rising 0.4% to $4,970.30 per ounce after previously falling below the $5,000 mark. Silver increased 1% to $76.45 per ounce.

In currency trading, the U.S. dollar strengthened against the Japanese yen, rising to 153.38 yen from 152.72 yen. The euro weakened slightly to $1.1857 from $1.1871.

The market’s reaction highlights a critical juncture for technology investments as artificial intelligence transforms from a promising concept to a disruptive economic force, leaving investors to navigate the uncertain boundary between technological innovation and financial returns.