NEW YORK, New York - U.S. stock markets fell sharply again on Friday with tech stocks, particularly those associated with AI, taking the brunt of the damage. What was happening on Wall Street was being mirrored around the world.

"The latest development is competition from open-source models in China, which are reportedly rivaling the performance of leading offerings from Anthropic and OpenAI, raising fresh concerns about the heavy pace of technology spending," Angelo Kourkafas, senior investment strategist at Edward Jones told CNBC Friday.

"We are seeing signs of fatigue, with end-user demand for AI becoming more price sensitive and the market starting to penalize companies that are ramping spending too aggressively," Jones said. "We view this volatility as a signal that the AI theme is likely maturing rather than breaking, which is a healthy part of how transformative investment cycles evolve."

The Standard and Poor's 500 dropped 76.09 points to settle at 7,457.68, a decline of 1.01 percent, as losses were felt across all 11 major sectors. The broad-market index traded between a session low of 7,431.26 and a high of 7,498.47, with heavy trading volume of 3.29 billion shares changing hands. The benchmark remains well above its 52-week low of 6,212.69 but is now retreating from its peak of 7,620.90.

The Dow Jones Industrial Average suffered its own significant setback, falling 406.67 points to close at 52,146.30, down 0.77 percent. The blue-chip index fluctuated within a range of 51,986.74 to 52,610.97 during the session, on volume of 532.167 million shares. The Dow's 52-week trading band now stands between 43,340.68 and 53,289.30.

The tech sector bore the brunt of Thursday's selling pressure, with the NASDAQ Composite plunging 361.70 points to finish at 25,520.24, a steep drop of 1.40 percent. Trading was active, with 5.732 billion shares exchanged, as investors rotated out of high-growth names amid rising bond yields and concerns over stretched valuations in artificial intelligence and semiconductor stocks.

The session's declines mark a reversal from recent gains, as investors digest a mixed bag of corporate earnings, ongoing geopolitical uncertainties, and signals from the Federal Reserve regarding the future path of interest rates. With the Nasdaq underperforming its peers, market participants will be watching closely to see whether this rotation out of growth stocks gathers further momentum in the days ahead.

Trading volumes were elevated across U.S. exchanges, suggesting institutional participation in the sell-off. All three major U.S. indices remain positive on a year-to-date basis, but Thursday's action serves as a stark reminder of the volatility that continues to characterize the current market environment.

U.S. Dollar Dominates Most Majors But Stumbles Against Franc and Loonie

The U.S. dollar posted a mixed performance in global foreign exchange markets on Thursday, advancing against most of its major counterparts but losing ground against the Swiss franc and the Canadian dollar in a session marked by shifting risk sentiment and interest rate expectations.

The greenback was broadly bid across European and Asian trading desks, with traders citing resilient U.S. economic data and widening yield differentials as key supports. However, the dollar's winning streak was interrupted by two of its traditional safe-haven and commodity-linked rivals.

Against the euro, the dollar held firm as the shared currency edged lower. The EUR-USD pair settled at 1.1438, virtually unchanged on the day but slipping by 0.04 percent, reflecting modest dollar strength as European growth concerns persisted.

The dollar scored a more decisive gain against the British pound, with GBP-USD dropping to 1.3456, a decline of 0.16 percent for the pound. Traders attributed the move to fading expectations of further aggressive tightening from the Bank of England, while the U.S. currency benefited from its relative yield advantage.

Versus the Japanese yen, the dollar continued its steady ascent, with USD-JPY rising to 162.4600, an increase of 0.04 percent. The pair remained near multi-decade highs as the interest rate gulf between the U.S. and Japan showed no signs of narrowing, keeping downward pressure on the yen.

The Australian dollar struggled to find traction despite a generally stable session. The AUD-USD pair finished at 0.6984, effectively flat but recording a fractional decline of 0.17 percent, as softer commodity prices and caution over China's economic outlook weighed on the resource-linked currency.

However, the dollar's dominance met its match against the Canadian dollar and the Swiss franc. The USD-CAD pair retreated to 1.4011, a drop of 0.23 percent for the greenback, as stronger-than-expected Canadian inflation data fueled speculation that the Bank of Canada may delay rate cuts, boosting the loonie.

Meanwhile, the Swiss franc continued its recent resurgence, pushing USD-CHF down to 0.8075, a decline of 0.17 percent for the dollar. Safe-haven flows into the franc, coupled with expectations that the Swiss National Bank may remain vigilant on inflation, helped the currency outperform its U.S. counterpart.

In summary, the dollar ended the day up against the euro, pound, yen, and Australian dollar, but suffered reversals against the Swiss franc and the Canadian dollar—a reminder that the greenback's path higher is unlikely to be a straight line as global central banks diverge in their policy outlooks.

Global Stock Markets Close Mixed as Tech Rout Deepens, European Indices Slip

World stock markets closed with a decidedly bearish tilt on Thursday, as a sharp sell-off in Asian technology shares spilled over into European trading, while U.S. markets remained closed for a holiday. The selling pressure was most acute in Japan and South Korea, though a handful of European and Asian benchmarks managed to eke out modest gains.

Canada's S&P/TSX Composite index however closed in negative territory, though its losses were reasonably well contained. The index shed 76.30 points to end the day at 35,263.85, a decline of 0.22 percent, on volume of 236.664 million shares. The resource-heavy Canadian market found some support from firmer gold prices, which helped offset weakness in technology and industrial names.

In London, the FTSE 100 bucked the global trend, rising 28.13 points to close at 10,600.37, an increase of 0.27 percent. The UK-based index found support from commodity and energy stocks, trading between a low of 10,527.65 and a high of 10,623.69.

Continent-wide, however, the mood was somber. Germany's DAX P slipped 84.51 points to finish at 24,830.98, a drop of 0.34 percent, while France's CAC 40 fell 39.05 points to 8,338.81, declining 0.47 percent. The broader EURO STOXX 50 I lost 52.74 points to end the session at 6,230.87, a decrease of 0.84 percent.

The Euronext 100 Index also retreated, shedding 15.16 points for a close of 1,905.37, down 0.79 percent. In a rare bright spot, In Belgium, the BEL 20 managed a gain of 12.37 points, settling at 5,630.21 for a rise of 0.22 percent.

The real damage, however, was seen in Asia, where technology-heavy bourses were hammered. Japan's Nikkei 225 cratered by a staggering 2,694.42 points to close at 64,141.12, a brutal decline of 4.03 percent, as semiconductor and AI-related stocks were hit by profit-taking and concerns over U.S. export restrictions.

South Korea's KOSPI Composite Index suffered an even steeper percentage loss, plunging 463.81 points to 6,820.60, a drop of 6.37 percent, on heavy trading volume of 424,280 contracts. Taiwan's TWSE Capitalization Weighted Stock Index fared worst of all, collapsing 2,953.71 points to settle at 42,671.27, down a dramatic 6.47 percent.

In Hong Kong on Friday, the HANG SENG INDEX also felt the pain, losing 446.36 points to finish at 24,562.24, a fall of 1.78 percent, while China's SSE Composite Index dropped 118.26 points to 3,764.15, declining 3.05 percent on turnover of 620.589 million shares.

Elsewhere in the Asia-Pacific, Australia's S&P/ASX 200 gave back 44.00 points to end at 8,796.70 (down 0.50 percent), and the broader ALL ORDINARIES fell 58.10 points to 8,978.80, a loss of 0.64 percent.

The STI Index in Singapore slipped 29.95 points to 5,509.43, down 0.54 percent.

However, there were some pockets of resilience. India's S&P BSE SENSEX rallied strongly, climbing 964.59 points to close at 78,151.45, a robust gain of 1.25 percent. Indonesia's IDX COMPOSITE added 67.33 points to finish at 6,175.54, rising 1.10 percent, while Malaysia's FTSE Bursa Malaysia KLCI advanced 9.26 points to 1,731.45, up 0.54 percent. New Zealand's S&P/NZX 50 INDEX GROSS also notched a gain, rising 79.90 points to 13,694.68, an increase of 0.59 percent.

In Tel Aviv, the TA-125 fell 15.32 points to 4,081.26, a decline of 0.37 percent, and South Africa's Top 40 USD Net TRI Index lost 87.43 points to finish at 6,587.43, down 1.31 percent.

The divergent session underscores growing investor nervousness over the sustainability of tech valuations, even as some regional markets continue to benefit from domestic economic optimism. With U.S. markets closed, traders now look to Friday's session for further direction.

(This report incorporates quotes retrieved with the assistance of artificial intelligence).

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