Global tech rout deepens as AI chip demand soars and US stocks extend losing streak
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3 months · 22 summary articles
Global risk aversion deepened on Friday as surging demand for AI chips sent technology costs soaring, undermining end-user demand and sending US tech stocks to their longest losing streak of 2026. The Nasdaq Composite fell for a fifth consecutive session , while Asian markets suffered sharp sell-offs as investors reassessed the sustainability of the AI rally. Core US inflation met forecasts, tempering expectations of Federal Reserve rate hikes from two to one by year-end, yet the broader sell-off in tech shares showed no sign of abating.
Micron Technology’s shares tumbled 5% on Friday alone, dragging the sector lower as global technology stocks extended their decline . The rout extended to Europe, where the DAX index lost more than 350 points, weighed down by negative media reports on OpenAI and Apple, while oil prices hovered near $70 per barrel . Futures pointed to further weakness on Wall Street, with analysts warning that the five-day losing streak in tech shares could persist amid overstretched valuations.
Optimism over a potential Middle East peace deal and reassuring AI earnings provided only temporary relief, as caution dominated ahead of Thursday’s US PCE and growth data, which could reshape inflation expectations and Federal Reserve policy . Meanwhile, financial regulators are scrambling to develop tools to counter the rise of AI, signaling growing unease over its systemic impact on markets .
The Federal Reserve’s new chair, Warsh, delivered a firm inflation stance that eased long-term price expectations, while oil’s retreat below $70 per barrel further tempered inflation concerns . Yet the immediate market reaction remained negative, with the Russell rebalance expected to add volatility to high-profile AI-linked stocks such as SpaceX . As the week drew to a close, investors braced for further turbulence, with the tech sector’s vulnerability exposed by the relentless surge in chip demand and its cascading effects on global markets.
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