AI stock sell-off drags world markets as oil hits five-month high

An AI stock sell-off pulled markets lower worldwide on Thursday, while oil rose to a five-month high on worries about the Iran war.

The weakness started in Asia, where many AI and technology shares trade. Early on, South Korea’s Kospi lost about 3.5%. Hong Kong’s Hang Seng shed about 3%. Japan’s Nikkei 225 sank 2.7%.

Wall Street opened lower, with the Nasdaq composite down 1.3% early in the day. Nvidia‘s drop mattered most because it is the largest stock on Wall Street by value.

What drove the AI stock sell-off

Investors worry that the AI boom is under threat because borrowing has become expensive. The firms use that cash for data centers and more chips.

Many also fear that prices shot too high during a years-long frenzy, even though firms in the field keep reporting growth.

Lam Research, a supplier of equipment for chipmaking, reported stronger profit and revenue than analysts expected. Even so, its shares tumbled 10.1%, because its profit outlook for the final three months of 2026 was slightly below forecasts. The stock had risen 52.4% this year.

Meta Platforms lost 5.7% after its profit missed estimates, though revenue beat them. Tesla fell 2.5%, since revenue came in weaker than forecast. Nvidia slipped 1.8%, and as Wall Street’s largest company, it weighed most on the S&P 500.

CoreWeave, which borrowed to buy Nvidia’s chips and rents them out in the cloud, dropped 3.6% amid worries about its debt.

Chip stocks lead losses

A second report said this week’s losses topped $1 trillion in market value. It described the AI stock sell-off as the harshest of its kind since the technology went mainstream.

Chipmaker Advanced Micro Devices plunged 17.3% on Wednesday, despite beating profit expectations and giving a strong revenue outlook. Investors focused on valuations after the stock doubled over the past year.

In Asia, Samsung Electronics fell 5.9% and SK Hynix 6.7%. Uber dropped 5.1% after weak results, while Super Micro Computer gained 13.8% on strong profit. Not every stock fell. Walmart edged up and took its market value past $1 trillion for the first time. The Nasdaq remained over 3% under its peak.

Oil adds pressure

Brent crude rose 3.3% to $112.38 a barrel after touching a five-month high. It had moved between $97 and $112 through October, as traders waited to learn when the war would let the energy industry return to normal.

Government bonds offered a refuge. The 10-year Treasury yield eased to 5.05%, from 5.13% the evening before and above 5.30% earlier in October. That is still well above the 3.97% level before the war with Iran.

In Europe, France’s CAC 40 lost 1% in early trading because bond yields there jumped again. Debt worries and violent protests have raised pressure on the government.

India’s Sensex ended 0.60% lower, and analysts pointed to profit booking after gains that followed the India-US trade deal announcement.

For now, the AI stock sell-off shows how fragile sentiment has become, and rising oil prices add to the strain on investors.