Global Markets Slide as Wall Street Retreats Amid AI and Rate Fears

Global markets declined on Friday after Wall Street's recent drop, driven by concerns about artificial intelligence and interest rates....

Global markets declined on Friday after Wall Street's recent drop, driven by concerns about artificial intelligence and interest rates.

The S&P 500 is expected to decrease by 0.3%, while the Dow Jones Industrial Average fell by 0.2%, as oil prices rose.

During early European trading, the UK's FTSE 100 dropped over 1.1% to 9,704.41. The German DAX declined by 0.7% to 23,876.94. In Paris, the CAC 40 decreased by 0.4% to 8,198.79.

In South Korea, where semiconductor manufacturers have formed a partnership with artificial intelligence chip provider Nvidia, the Kospi dropped 3.8% to 4,011.57. Samsung Electronics declined by 5.5%, while SK Hynix fell by 8.5%.

The Taiex in Taiwan fell by 1.8%, also dragged down by drops in technology stocks.

Japan's Nikkei 225 dropped almost 1.8% to 50,376.53, undoing the gains from the previous day. SoftBank Group was the main cause of the decline, falling by 6.6%.

In Chinese markets, Hong Kong's Hang Seng index fell by almost 1.9% to 26,572.46, while the Shanghai Composite index dropped 1% to 3,990.49.

Reports from Friday indicated that China's factory production increased by 4.9% year-on-year in October, marking the slowest growth in 14 months, which was lower than the 6.5% recorded in September and also below the anticipated 5.5%. Investments in fixed assets, including machinery and equipment, declined by 1.7% year-on-year during the period from January to October.

Ongoing weakness in property investments was a major factor holding back business investment.

Australia's S&P/ASX 200 fell by 1.4% to 8,634.50, with expectations of a rate cut from the Reserve Bank of Australia diminishing following a positive employment report.

India's BSE Sensex dropped by almost 0.4%.

On Thursday, the U.S. stock market experienced one of its most significant declines since the spring sell-off. Concerns about whether the interest rate reductions that Wall Street has been anticipating will materialize have also affected investor confidence.

The S&P 500 dropped 1.7%, moving further away from its record high reached at the end of last month. This marked the worst day in a month for the index, which is central to numerous 401(k) plans, and the second worst since April's decline following President Donald Trump's unexpected "Liberation Day" tariffs.

The Dow Jones Industrial Average fell by 1.7% from the peak it reached the previous day.

The Nasdaq index declined by 2.3%.

Nvidia faced the biggest decline in the market following a 3.6% drop in the chip company's stock. Other stocks that had been riding the wave of the artificial-intelligence boom also encountered difficulties, with declines of 7.4% for Super Micro Computer, 6.5% for Palantir Technologies, and 4.3% for Broadcom.

Concerns are increasing regarding how much further AI-related stocks can rise after their impressive performance. For instance, at the beginning of this month, Palantir had increased by approximately 174% year-to-date.

One of the main reasons the U.S. market has set new records, even with a slowing job market and rising inflation, is due to these attention-grabbing performances. However, the rapid rise in AI stock prices has led to comparisons with the 2000 dot-com bubble, which eventually collapsed and caused the S&P 500 to drop by almost 50%.

Meanwhile, shares in sectors beyond AI also declined on Wall Street as investors feared the Federal Reserve might not implement another reduction in interest rates in December, a move that had been widely anticipated.

Reduced interest rates may boost the economy and increase investment values, despite potentially increasing inflation. A pause in rate reductions could negatively affect U.S. stock prices, especially since they have already reached record levels due to expectations of further cuts.

Recent days have seen a significant drop in expectations that the Fed will lower its primary interest rate for the third time this year. According to CME Group data, traders now believe there is approximately a 51.9% chance of this happening, down from nearly 70% just a week ago.

In other transactions on Friday morning, U.S. standard crude oil increased by 74 cents to $59.43 per barrel. Brent crude, the global reference, went up 69 cents to $63.70 per barrel.

The U.S. dollar increased to 154.68 Japanese yen, up from 154.54 yen. The euro decreased to $1.1627, down from $1.1635.

Provided by SyndiGate Media Inc. (Syndigate.info).