Wall Street looked set to stabilise on Friday, after fears about tighter AI regulations in the United States had wiped trillions of dollars off world stock markets’ value and triggered a dash for safe-haven government bonds.
Europe’s main bourses tumbled over 1.5 per cent as the turmoil continued to play out, but with Nasdaq futures pointing 1.5 per cebt higher and Wall Street’s VIX fear gauge also easing, investors were hoping for a respite of sorts.
Key AI stocks were mixed. Nvidia rose 4.5 per cent in premarket trading, after suffering its worst day since January 2025, when the emergence of low-cost Chinese AI model DeepSeek hammered markets.
Other heavyweight chipmakers, including AMD, Intel, Broadcom, and Micron Technology, were up between 4.5 per cebt and 8 per cent, while Elon Musk’s Tesla, and SpaceX, were also up 2 per cent and 4 per cent after losses earlier this week.
The expected bounces were in stark contrast with market action in the rest of the world.
In Asia, Japan’s Nikkei, and South Korea’s KOSPI, both slumped about 6 per cent.
For the Nikkei — just like Wall Street the previous day — it was the biggest one-day drop since US President Donald Trump’s “Liberation Day” trade tariff panic of April 2025.
Taiwan’s benchmark, plunged more than 8 per cent at one point, before cutting losses as authorities scrambled to stem the selling.
“This has been brutal,” James Athey, a fund manager at investment firm Marlborough in London, said, explaining that retail and hedge fund selling had been feeding off each other.”
The question is where we go now? We are still looking at indexes that are near record highs and a sector (AI) where capex is still massive,” Athey said.
“So I think it is going to be a huge test of market sentiment – and the belief in AI – in the coming days.”
