The four major U.S. stock indexes plunged across the board in early trading on the 17th, reflecting the continued rise in market concerns about spending on artificial intelligence (AI). In addition, the launch of a new model, Kimi K3, by the Chinese AI startup Moonshot AI, which claims that its performance is comparable to top U.S. products, further deepened the market’s pessimism.
After US semiconductor stocks led the decline in the previous trading day, selling pressure spread to Asian stocks on the 17th, then affected European stocks, and US stocks also continued to fall at the opening, forming a relay decline in global stock markets.
The Dow Jones Industrial Average fell 340 points, or 0.6%, in early trading on the 17th; the S&P 500 fell 1.3%; the Nasdaq fell 2.2%; and the Philadelphia Semiconductor Index plummeted by about 5.2%, having fallen more than 20% from its high, entering a bear market. TSMC’s ADR fell 5% in early trading. Apple remained flat, while Nvidia fell more than 3%, allowing Apple to overtake Nvidia and regain its position as the world’s most valuable company.
Brown Brothers Harriman strategists noted in a report that investors are “increasingly skeptical about whether the current AI capital spending boom can continue,” adding that “the Bank for International Settlements (BIS)’s annual economic report warns that past investment booms driven by transformative technologies have often been accompanied by cycles of boom and bust.”
Tensions between the United States and Iran have escalated further, with the fragile ceasefire agreement reached last month now broken, pushing up oil prices. West Texas Intermediate crude futures were last quoted above $81 per barrel, while international benchmark Brent crude futures stood above $86 per barrel.
Iranian officials also claimed that they had targeted US forces in Syria and Bahrain, expanding Tehran’s offensive operations to more areas in the Middle East. US Central Command stated that US forces had launched airstrikes against Iran for the sixth consecutive night, hitting dozens of military targets and damaging logistical infrastructure and naval combat capabilities.
