Chip selloff drags global stocks lower on AI spending concerns

Global stocks slid on Thursday as a sharp decline in semiconductor shares following weak earnings from Qualcomm and worries that a Democrat-controlled US Congress might hinder investment in artificial intelligence infrastructure. Major Wall Street indexes experienced a downturn, with the Nasdaq nearing a correction from its all-time high.

Technology stocks suffered the most among S&P 500 sectors, while the Philadelphia Semiconductor Index plummeted by 11%. The Dow Jones Industrial Average slipped 2.2%, the S&P 500 dropped 3.4%, and the Nasdaq Composite fell 5.2%. Qualcomm shares plunged 11% after its smartphone chip sales fell short of expectations. Mark Hackett, chief market strategist at Nationwide, attributed the market's volatility to disappointing earnings and the possibility of slower AI infrastructure growth under a Democratic-led Congress.

The MSCI All-World index and Europe's STOXX 600 both experienced losses. Hedge funds have been actively selling semiconductors and "neoclouds" for weeks, and they remain bearish on the sector. Oil prices rebounded, with Brent crude futures climbing 2.58% to $97 a barrel, as investors reconsidered the impact of the US-Iran conflict.