In the United States, major indices closed lower. The S&P 500 dropped around 1.6%, while the tech-heavy Nasdaq 100 fell nearly 2%. Investors became worried that heavy spending on AI may not quickly translate into strong profits for companies, especially large technology firms.
The weakness in the US affected Asian markets the next day. The MSCI Asia Pacific Index slipped about 0.7%, with shares in Japan and South Korea among the biggest losers. Technology stocks were hit the hardest, as global investors reduced exposure to riskier assets.
Back in India, markets also reacted to global cues. The Sensex and the Nifty 50 saw notable declines, mainly due to selling in IT and tech-related stocks. Broader market sentiment remained weak as traders tracked international developments.
Apart from AI concerns, investors are also watching US economic signals closely. A strong jobs report has reduced expectations that the Federal Reserve will cut interest rates aggressively this year. Higher interest rates generally make investors more cautious, especially toward growth stocks.
Also Read: Rolls-Royce bets bigger on India after PM Modi meet