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Business
Jun 08, 2026
Analyzed by GPT OSS 120B

Stock Markets Slide as AI‑Heavy Tech Stocks Face Funding Scrutiny

AI Summary
Global equity markets fell on Monday after a sharp sell‑off in US tech shares, driven by worries over AI‑related spending and rising oil prices amid Middle‑East tensions. Asian indices led the decline, while Brent crude jumped close to 5%.

Tech‑Heavy Sell‑off Triggers Global Market Decline

Investors reacted to a late‑week plunge in US tech stocks, fearing that companies at the centre of the artificial‑intelligence boom may struggle to fund their “eye‑watering” capital‑expenditure plans. The sell‑off spilled over to Asian and European markets on Monday, compounding concerns sparked by fresh hostilities in the Middle East.

Numbers Show Double‑Digit Slumps in Asian Indices and Rising Oil

  • South Korean Kospi fell nearly 9% before trading was briefly halted, led by Samsung Electronics (‑9%) and SK Hynix (‑6%).
  • Japan's Nikkei 225 dropped 3%; Hong Kong's Hang Seng slipped 1.5%.
  • In London, the FTSE 100 opened down 0.4%, with Rolls‑Royce and IAG among the biggest losers, while oil majors BP and Shell rose.
  • European AI‑linked chipmakers BE Semiconductor Industries (‑4.5%) and ASML (‑3.2%) dragged the pan‑European Stoxx 600 down 0.9%. Aixtron fell 6% and Nokia 5%.
  • The US Nasdaq lost almost 5% in the prior week; the S&P 500 fell 2% on a weekly basis, ending a nine‑week gain streak.
  • Brent crude rose nearly 5% to $97.60 a barrel after Iran and Israel exchanged fire.

Investor Sentiment Shifts Amid AI Valuation Concerns and Geopolitical Tension

Chief investment strategists highlighted two converging pressures: higher‑for‑longer interest‑rate expectations from the Federal Reserve and the need for AI firms to secure fresh funding for costly projects. Susannah Streeter of Wealth Club warned that markets are now pricing in a greater likelihood of a rate hike this year. Charu Chanana of Saxo described the current phase as a “positioning reset”, noting that investors now demand clear evidence of earnings, monetisation, capex discipline and funding returns before backing AI‑centric valuations.

Geopolitical risk added to the nervousness, as the exchange of strikes between Iran and Israel raised fears of a wider disruption to the Strait of Hormuz, a key oil‑shipping lane.

What the Next Week May Hold for AI‑Centric Stocks

  • Analysts expect continued volatility in AI‑related equities until clearer guidance on funding needs and profitability emerges.
  • Oil price movements will likely remain a secondary driver, with any escalation in the Middle East potentially pushing Brent higher and further pressuring risk‑off sentiment.
  • Watch for Federal Reserve communications; any indication of an earlier or larger rate increase could deepen the sell‑off in high‑growth tech stocks.