JULY 17, 2026
Tech stocks are selling off for the second consecutive day on Wall Street – REUTERS/Brendan McDermid
The US stock market sank on Friday in a “bloodbath” for companies linked to the AI boom.
Shares on Wall Street fell heavily in the wake of sharp downturns in Japan and Taiwan as investors raised questions about the soaring valuations of companies tied to the technology.
Chip manufacturers were hit hardest after a blistering rally earlier in the year driven by surging demand.
The Nasdaq Composite, which is dominated by tech companies, plunged by 1.9pc in its sharpest fall in a month.
Kei Okamura, portfolio manager at financial adviser Neuberger Berman, said: “The word ‘bloodbath’ is accurate because it is across the board.”
Japan’s benchmark Nikkei 225 sank 4pc on Friday, having declined more than 10pc since its record high on June 25.
Taiwan’s Taiex index had shed 6.5pc after $2tn chip giant TSMC fell by 7.3pc a day after announcing record second-quarter profit but higher than expected spending plans.
Jim Reid, an analyst at Deutsche Bank, said: “Global equities are continuing to slump, as fresh doubts about the AI trade have driven a pronounced sell-off in tech stocks.”
Mr. Reid said there had been no single trigger for the downturn, which came as the world’s biggest technology companies prepared to report their second quarter results.
Tech stocks in Hong Kong were hit hard by Chinese AI start-up Moonshot, which on Friday unveiled a new large language model able to perform close to the levels of tools from US giant Anthropic.
The Beijing-based company unveiled Kimi K3, which it described as the world’s largest open AI model by parameter count, an indicator of its complexity.
Lian Jye Su, an industry analyst, said Chinese models were gaining traction because they could be deployed far more cheaply than leading US systems.
“They can be run at a fraction of the cost that OpenAI charges its clients,” he said.
Markets have also come under pressure from the renewed hostilities in the Middle East, which have sent oil prices soaring more than 15pc this month to over $85 a barrel.
Courtesy: Reuters
