Nasdaq drops 2.15% as AI stock sell-off resumes

The Nasdaq index closed down 2.15% and the S&P 500 lost 1.09%, closing figures reported by CNBC, as investors rushed to sell shares of AI-related technology companies. A Kuwait Times report citing AFP had put the Nasdaq down 1.2% and the S&P 500 down 0.4% around 1530 GMT, before losses widened by the close.

CoreWeave shares fell another 9%, while the Philadelphia Semiconductor Index dropped more than 2% during trading, according to Kuwait Times/AFP, reflecting broad pressure on the chip and cloud infrastructure sectors.

In Asia, the Jakarta Stock Exchange plummeted 11% following a warning from MSCI about potentially downgrading Indonesia's status as an emerging market, a decision that could prompt global funds to reduce their investments there, according to Kuwait Times/AFP.

This decline underscores global markets' sensitivity to AI company valuations, as investors watch whether the sector's rapid gains have inflated prices beyond their true value, fueling the sell-off.

What do these terms mean?

Nasdaq: An American stock exchange index that includes many technology companies and is monitored as a benchmark for the sector's performance.

Semiconductors: The essential electronic chips in modern devices and artificial intelligence hardware.

Emerging Markets: A classification by institutions like MSCI for less mature markets, influencing the flow of global funds into them.