Market tumble after AI‑fuelled rally The Nasdaq composite posted its steepest decline since June on Friday, pulling the index 7.8% below its recent peak. The broader Nasdaq‑100 also slipped 3.5%, edging toward a technical correction threshold of a 10% drop from its high.
Tech heavyweights lead the sell‑off Shares of chipmaker **Intel** and social‑media platform **Reddit** each tumbled roughly 29%, while memory‑chip specialist **Sandisk** fell 13%. The slide followed a bruising week for the four AI‑centric “hyperscalers” – Microsoft, Meta Platforms, Amazon and Alphabet – whose stocks were down 1%‑2% after earlier, sharper declines.
Financing the AI build‑out raises nerves According to Capital Economics, the hyperscalers have supplied more than a third of all capital spending by current S&P 500 constituents over the past year, a share that is expected to rise. Markets economist **John Higgins** warned that the sector’s growing dependence on external financing is unsettling investors, who are now questioning the scale and sustainability of the spend.
> “Now that the combined capital‑spending boom at the hyperscalers is becoming partly dependent on external financing, investors are becoming more nervous about the sums they are collectively investing and how they are doing it,” – John Higgins, Capital Economics.
Broad risk‑off spreads to other assets The sell‑off was not confined to technology. **Silver** dropped 6%, leaving it 31% lower for the year, while **gold** fell 3.5%, down 10% in 2026. **Oil** prices rose 2%, reflecting worries about a U.S. economy that many see as increasingly tied to AI‑driven growth.
Financial‑sector stocks also felt the pressure: **Goldman Sachs** slid 4% and **Jefferies** fell 6%. In the crypto space, **Bitcoin** slipped 3% after a major security breach at Binance that resulted in a $6 billion loss.
Investor sentiment and outlook Annex Wealth Management’s chief economic strategist **Brian Jacobsen** noted that investors are now collectively deciding which AI spenders will successfully monetise their investments.
> “Investors are voting all of a sudden and all together on who will monetize the investment and who won’t,” – Brian Jacobsen.
Wedbush Securities’ managing director **Sahak Manuelian** described the recent moves as a classic “what goes up, must come down” correction, adding that the market is now seeing a “nasty downdraft” after a period of parabolic gains.
> “When you’ve had the parabolic‑like moves, it makes for a very nasty downdraft,” – Sahak Manuelian.