New York- Declines by computer chip makers and other companies that have benefited from the rise of artificial intelligence weighed on stock markets around the world on Thursday.
The S&P 500 fell 0.5%, despite the fact that, within the index, more stocks rose than fell. He Dow Jones The Industrial Average fell 105 points, or 0.2%, and the Nasdaq Composite index plummeted 1.5%.
Nearly three in four stocks in the S&P 500 rose after several of the country’s largest companies reported better-than-expected fourth-quarter results.
Abbott shares rose 10.7% after the healthcare company reported better-than-expected earnings and revised up its full-year earnings guidance. Shares of JB Hunt Transport Services rose 8% after the freight company also beat analyst expectations for the latest quarter.
However, a 1% change in the share price of Nvidia has a greater impact on the S&P 500 than a 1% change in that of any other company, since it is the one with the largest market capitalization of Wall Street.
Nvidia fell 2.4%, making it the largest company in the index. Other companies in the artificial intelligence sector that had posted profits also collapsed, giving up some of their spectacular profits.
1/21 | These jobs could disappear in 20 years. It is anticipated that artificial intelligence will replace everyday work employees. (Amazon via AP) – The Associated Press
Micron Technology fell 5.6%, reducing its year-to-date rise to below 199%. Sandisk fell 12.6%, but still has risen 494% so far this year. Western Digital plummeted 9.2%, but is still up 171% so far this year.
These stocks have been under pressure for weeks due to fears that their prices have skyrocketed too high and that the voracious demand for computer memories and processors may not be sustainable if artificial intelligence ends up not generating as many profits or as much productivity as promised.
In total, the S&P 500 fell 38.63 points, reaching 7,533.77. The Dow Jones Industrial Average fell 105.67 points to 52,552.97, and the Nasdaq Composite index plummeted 387.28 points to 25,881.95.
The losses occurred despite the fact that Taiwan Semiconductor Manufacturing Co., a leading company in the chip sector, announced profits in the last quarter that were higher than analysts’ forecasts. Its shares in Taiwan rose 1.2%, but those listed in the United States fell 2.3%.
In South Koreadeclines in shares of leading AI companies such as Samsung Electronics and SK Hynix led to a 6.4% decline in the Kospi index. This has been one of the most unstable markets in the world in recent weeks due to the great weight that these two leading companies in artificial intelligence have in it.
The previous day, the Kospi rose 6.2%, but in the last two weeks it has recorded drops of 8.9%, 7.8% and 5.3%.
The increase in interest rates by the Bank of Korea also weighed on share prices in Seoul; This is the first increase carried out by the bank since 2023.
Higher interest rates may contain inflation, but they also slow down the economy and negatively affect the prices of all types of investments. Additionally, concerns are growing that the Federal Reserve and other central banks around the world may be forced to raise rates to curb the effects of high oil prices.
Oil prices are near a one-month high on concerns that the war with Iran will prevent oil tankers from passing through the Strait of Hormuz and hamper crude shipments from the Persian Gulf to customers around the world.
The price of a barrel of Brent crude briefly rose above $86 per barrel early in the morning, before losing that gain and falling back to $84.23, down 0.8% from the previous day.
In the bond market, the yield on the 10-year Treasury bond rose slightly to 4.56%, from 4.55% late Wednesday and from just 3.97% before trading began. war with Iran. Rising yields have already pushed the average rate on 30-year mortgages to their highest level in almost a year.
Data on the US economy were mixed, adding to the turbulence rocking the bond market. According to one report, consumers spent less in American stores last month than economists expected. However, excluding gas station sales, U.S. consumer spending remained strong.
According to another report, fewer applications for unemployment benefits were recorded by American workers last week, highlighting the strength of the labor market, while a third report indicated that manufacturing activity in the Mid-Atlantic region is better than economists expected.
In foreign stock markets, indices largely fell Europe and Asiawith decreases of 1.8% in Shanghai and 2.8% in Tokyo.
Hong Kong’s Hang Seng Index was an exception and rose 1.3%. Alibaba shares rose after China’s cyberspace regulator announced on Wednesday that it had approved the use of artificial intelligence tool “Apple Intelligence” in the country. An Alibaba spokesperson stated that its “Qwen” model will be integrated into “Apple Intelligence.”