AI stock selloff and $113 oil pull global markets lower

Strong results did not protect tech stocks

Lam Research reported summer-quarter revenue and profit slightly above analyst expectations. Its shares still fell 11.8%. Meta Platforms, which is developing the AI agent Muse, lost 7% even though quarterly revenue beat expectations; profit missed. Tesla fell 3.1% after profit topped forecasts but revenue came in below them.

The pressure had started in Asia, where technology companies make up a large share of major indexes. South Korea’s Kospi fell 3.5%, Hong Kong’s Hang Seng lost 3%, and Japan’s Nikkei 225 declined 2.7%.

Oil and bonds added another source of strain

Brent rose 4% to $113.17 a barrel after briefly reaching a five-month high. The rise reflects uncertainty over the war with Iran and how long it will take the global energy industry to return to normal operations.

France’s CAC 40 fell 1.4%, among the steepest declines in Europe. French government bond yields have been rising amid concerns about public debt and a strained budget; protests across the country have added pressure on the government to increase spending, potentially pushing debt higher.

US Treasury yields moved in the opposite direction on Thursday, falling as investors sought safer assets during the stock selloff. The 10-year yield dropped to 4.97% from 5.13% at the end of Wednesday, after exceeding 5.30% earlier this month. That decline came despite a report suggesting the US economy may be holding up better than economists expected: fewer Americans filed for unemployment benefits last week, a possible sign that layoffs remain low.

The market is rewarding more than one kind of company

Two-thirds of S&P 500 companies finished Thursday higher, but gains outside technology were overwhelmed by the influence of big tech stocks. Procter & Gamble, Lockheed Martin and CSX all beat summer-quarter profit expectations in recent reports, helping limit the broader market’s decline.

Procter & Gamble CEO Shailesh Jejurikar said the company expected geopolitical and economic challenges to continue, but kept its annual forecasts for revenue growth, profit and other measures. Shares of the owner of Crest, Olay and Oral-B rose 5.6%.

I think the day’s split matters more than the broad index decline: investors were not selling everything indiscriminately, but strong results were not enough to shield several major technology companies. The harder question is whether AI spending can keep earning that confidence when financing data centers and buying chips is expensive, and even earnings beats are failing to reassure investors.

The S&P 500 fell 93.74 points to 7,663.43. The Dow Jones Industrial Average gained 11.89 points to 52,867.98, while the Nasdaq lost 694 points to 26,008.86.