Asian stock markets experienced significant declines on Friday, with Japan’s Nikkei 225 index suffering a notable drop. The index plummeted by 5.8%, falling below the 63,000 mark, driven by a substantial sell-off in technology and artificial intelligence-related stocks that unsettled investors. Taiwan’s market also saw a considerable decrease of more than 5%, while Hong Kong’s Hang Seng index and China’s Shanghai Composite fell by 2% and 1.6%, respectively. In Australia, the S&P/ASX 200 slipped 0.7%, adding to the overall regional downturn.
The pressure on technology stocks has been mounting in recent weeks, largely due to concerns that valuations in the artificial intelligence sector may have escalated too rapidly. Investors are growing skeptical about whether the demand for advanced chips and memory products will sustain its momentum if artificial intelligence does not deliver the anticipated profits and productivity improvements.
In the United States, the Nasdaq Composite mirrored the Asian sell-off, dropping 1.5% on Thursday. Major chipmakers contributed to the decline, with Nvidia experiencing a 2.4% decrease. Other significant players in the sector, including Micron Technology, SanDisk, and Western Digital, also reported notable losses, reflecting the broader uncertainty affecting the market.
As stock markets faced turbulence, oil prices saw an upward trend amid escalating tensions in the Middle East. Concerns about potential disruptions to global energy supplies through the Strait of Hormuz drove Brent crude prices up by 1.1% to $85.13 per barrel. Meanwhile, the US benchmark crude increased by 1.3%, reaching $79.95 per barrel, highlighting the market’s sensitivity to geopolitical developments.