Wall Street Slides as AI Stock Rally Loses Steam Amid Inflation Concerns

1 hour ago

9036 posts

Wall Street Slides as AI Stock Rally Loses Steam Amid Inflation Concerns/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Global stock markets declined Friday as investors continued selling artificial intelligence-related stocks following months of strong gains. Rising inflation concerns and the possibility of higher interest rates added pressure on technology shares while oil prices continued easing.

Specialist Michael Gagliano works at his post on the floor of the New York Stock Exchange, Thursday, June 25, 2026. (AP Photo/Richard Drew)

Wall Street AI Stocks Quick Looks

U.S. futures pointed lower before Friday’s opening bell.
Nasdaq futures fell more than 1%, extending weekly losses.
Chipmakers including Micron, Intel, Broadcom and Qualcomm declined in premarket trading.
Asian technology stocks posted sharp losses after recent record highs.
Investors remain concerned that AI valuations have outpaced earnings growth.
Falling oil prices provided some relief despite broader market weakness.

Deep Look

AI Stocks Continue Pullback

Wall Street opens lower Friday as investors continued taking profits from artificial intelligence stocks following months of exceptional gains.

Nasdaq futures dropped 1.4% before the opening bell, putting the technology-heavy index on track for a weekly decline of more than 5%, its second sharp weekly retreat this month. Futures tied to the S&P 500 slipped 0.6%, while Dow Jones Industrial Average futures edged 0.2% lower.

The recent volatility reflects growing concerns that AI-related companies may struggle to deliver profits large enough to justify their soaring market valuations.

Chipmakers Lead Market Declines

Semiconductor companies remained under pressure during premarket trading.

Micron Technology fell about 5%, while Intel lost 3.6%. Broadcom and Qualcomm also declined by nearly 2% each after recent rallies fueled by optimism surrounding AI infrastructure spending.

Although strong earnings from Micron and upbeat forecasts from Qualcomm recently boosted investor confidence, traders have become increasingly cautious about whether the AI investment boom can maintain its current pace.

Inflation and Interest Rates Weigh on Markets

Higher inflation expectations have also added pressure to technology shares.

Investors increasingly believe the Federal Reserve could raise interest rates later this year if inflation remains elevated. Higher borrowing costs generally reduce the appeal of fast-growing technology companies by increasing financing costs and lowering future earnings valuations.

Those concerns have prompted investors to lock in profits after one of the strongest AI-driven market rallies in recent years.

Asian Markets Mirror U.S. Volatility

Technology stocks across Asia also experienced another volatile trading session.

Japan’s Nikkei 225 fell 4.2%, while South Korea’s Kospi dropped 5.8%, though both indexes recovered some losses before the close.

Major chipmakers led the declines, with Samsung Electronics falling 5.3%, SK Hynix dropping 8.4%, SoftBank Group losing 12.5% and Advantest sliding 3.2%.

Hong Kong’s Hang Seng Index declined 1.8%, Shanghai’s Composite Index lost 2.3%, and Taiwan’s Taiex dropped 3.6%. Australia’s benchmark index bucked the trend with a modest 0.2% gain.

Broader Market Remains More Stable

Despite the weakness in technology shares, analysts noted that many non-tech sectors have remained relatively resilient.

Some economists believe the broader stock market could continue performing relatively well even if enthusiasm surrounding artificial intelligence cools, as sectors less dependent on AI investment have shown greater stability during recent market swings.

European markets also traded lower, with Germany’s DAX, France’s CAC 40 and Britain’s FTSE 100 all posting modest losses.

Oil Prices Continue to Ease

Energy markets remained calmer as oil prices drifted closer to levels seen before the U.S. and Israel’s war with Iran.

Brent crude fell to around $73.65 per barrel, while U.S. benchmark crude slipped to approximately $70.30. Both remain well below the highs above $100 reached after disruptions in the Strait of Hormuz raised concerns about global energy supplies.

The easing in oil prices has helped reduce some inflation fears, although investors continue monitoring economic data and central