<figure id="attachment_3225130" aria-describedby="caption-attachment-3225130" style="width: 1600px" class="wp-caption alignnone"><img loading="lazy" class="size-full wp-image-3225130" src="https://media.freemalaysiatoday.com/wp-content/uploads/2025/12/48313143-wall-street-1.jpg" alt="wall street" width="1600" height="1000" /><figcaption id="caption-attachment-3225130" class="wp-caption-text">The broad-based S&amp;P 500 eked out a 0.1% gain following a choppy session. (EPA Images pic)</figcaption></figure>
NEW YORK: World stock indexes struggled for inspiration Friday as investors remained cautious after heavy selling of companies seen as vulnerable to AI deployment and concerns about tech sector valuations more broadly.
A lower-than-expected US consumer inflation reading, meanwhile, modestly improved the outlook for Federal Reserve interest rate cuts &#8220;as investors increasingly envision a trio of rate cuts by year-end,&#8221; said a note from Interactive Brokers economist Jose Torres.
&#8220;But it&#8217;s been a bumpy ride for equities today, as bulls and bears wrestle with the tailwinds of monetary policy accommodation prospects against the backdrop of a crumbling AI narrative,&#8221; Torres added.
The broad-based S&amp;P 500 eked out a 0.1% gain following a choppy session.
US equities struggled for momentum a day after major indices lost more than 1%.
Most of the large companies in the so-called &#8220;Magnificent Seven&#8221; fell Friday, with Apple and Nvidia both shedding more than 2%.
In Europe, Paris dropped 0.4% at the close, with L&#8217;Oreal shares falling 4% after the cosmetics giant posted sales below analyst expectations, fuelling fears of weakness for its luxury brands and performance in the key Chinese market.
London&#8217;s FTSE 100 ended up 0.4% and the DAX advanced 0.25% in Frankfurt.
Amid growing concerns over the massive investments by AI heavyweights, investors also worry that software, logistics and even real estate companies will see their operations upended by artificial intelligence advances.
&#8220;The concerns that have revolved around AI disruption in the software segment have spread,&#8221; noted Joshua Mahony, chief market analyst at Scope Markets.
A sense of calm had descended on trading floors early in the week after recent asset-wide volatility, helped by forecast-busting US jobs figures.
However, growing concern about the hundreds of billions spent on AI infrastructure – and the bundles more announced in the past few days – has fanned speculation about when, if ever, companies will see a return.
The release of new tools this month that can perform crucial tasks in a range of fields, including legal, sales and marketing, has meanwhile compounded those jitters – hammering companies worried about competition.
&#8220;The AI scare trade has shocked investors in 2026 and has brought a significant amount of market dislocation,&#8221; said Kathleen Brooks, research director at XTB.

MatchPoint Times

Stocks sluggish as AI disruption worries move to fore

US equities struggled after major indices dropped over 1%, with Apple and Nvidia falling more than 2%.

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