Global markets took a hit on Thursday as artificial-intelligence stocks led a broad decline, while oil prices surged to their highest levels since May amid escalating tensions in the war with Iran. The S&P 500 dropped 1.2%, marking its worst day since July, while the Nasdaq composite plunged 2.6%. Despite most U.S. stocks rising, the tech-heavy indexes were dragged down by AI-related companies, which have faced volatility due to rising borrowing costs for data centers and AI chips.
Lam Research, a key player in semiconductor manufacturing, reported stronger-than-expected profit and revenue for the summer, yet its stock tumbled 11.8%. The company’s forecast for the current quarter fell slightly below analysts’ expectations, contributing to the sell-off. Other major tech stocks also declined despite mixed earnings reports. Meta Platforms lost 7% after reporting higher revenue but lower profit, while Tesla fell 3.1% despite a stronger-than-expected profit. Nvidia, the largest company by market value, dropped 4.4%, exerting significant downward pressure on the S&P 500.
The downturn in AI stocks spread to Asia, where indexes heavy on tech companies saw sharp declines. South Korea’s Kospi fell 3.5%, Hong Kong’s Hang Seng dropped 3%, and Japan’s Nikkei 225 sank 2.7%. In Europe, France’s CAC 40 fell 1.4%, compounded by rising yields on French government bonds amid concerns over the country’s debt and violent protests. Meanwhile, U.S. Treasury yields dropped sharply to 4.97% from 5.13%, as investors sought safer assets amid the market turmoil.
Despite the broader market decline, some companies bucked the trend. Procter & Gamble, Lockheed Martin, and CSX reported stronger-than-expected profits, with Procter & Gamble’s stock rising 5.6%. CEO Shailesh Jejurikar acknowledged ongoing geopolitical and economic challenges but reaffirmed the company’s growth forecasts. The S&P 500 closed at 7,663.43, the Dow Jones Industrial Average added 11.89 points to 52,867.98, and the Nasdaq composite fell 694.00 points to 26,008.86.