The MSCI All-Country World Index rallied off intra-session lows to trade flat, but the benchmark was still on track for its worst weekly performance since mid-November, with a decline of 1.6%.
A projected $600-billion AI spending spree by Amazon, Microsoft, Google and Meta this year has fuelled fears about the cost of the artificial intelligence boom, while concerns about disruption in sectors including software and data services continued.
“It’s almost been a week of two halves. You’ve had the AI software worries at the start of the week and then the AI spending worries at the end of the week,” Fiona Cincotta, Senior Market Analyst at City Index, said.
“And I think combined that just shows how sensitive and how nervous the market actually is with regards to the entire AI story.”
Stocks on Wall Street sold off on Thursday for a third straight day on AI fears, pushing the S&P 500 into negative territory for the year after survey data showed layoffs announced by United States (US) employers surged in January to the highest level for the month in 17 years, fuelled concern about the resilience of the US economy.
The S&P 500 software and services index dropped 4.6% on Thursday, having shed about $1 trillion in market value since January 28, in what traders and investors have called “software-mageddon”.
“There’s a massive rotation that’s going on, and Nasdaq is clearly underperforming the S&P and things like boring consumer staple stocks,” Prashant Bhayani, Chief Investment officer for Asia at BNP Paribas Wealth Management, said.
–Reuters–
