AI Winners’ Sell-Off Deepens as Oil Prices Surge Amid Iran Conflict
The sell-off among artificial-intelligence winners deepened Friday on Wall Street, while oil prices continued to climb amid escalating geopolitical tensions with Iran. The S&P 500 slipped 1%, ending its first losing week in three months, and Nvidia dragged the index lower after falling 2.2%, briefly ceding its position as the most valuable U.S. company to Apple. Applied Materials trimmed its year-to-date surge to 106% with a 5.6% drop, and Micron Technology swung wildly before closing down 0.5%.
Tech-heavy Asian markets faced steeper losses, with Taipei down 6.5%, Tokyo off 4%, and Shanghai falling 3%, as Taiwan Semiconductor Manufacturing Co. (TSMC) dropped 7.3%. A new Chinese AI model, Moonshot’s Kimi K3, intensified concerns over demand sustainability for Western chipmakers amid fears of oversupply and diminishing returns from AI investments.
Oil prices extended gains following renewed conflict with Iran, pushing Brent crude higher and raising inflationary pressures across emerging markets dependent on energy imports. European equities showed milder reactions due to their lower AI exposure.
As a strategist focused on EM dynamics, I see this dual shock—tech devaluation and energy inflation—as a critical inflection point. Markets are pricing in both AI overhang and geopolitical premium, which complicates monetary policy calibration in import-heavy economies.