AI Stocks Tumble as Inflation Fears Return

Wall Street ended the week lower as sharp swings in artificial intelligence (AI) stocks and renewed inflation concerns unsettled investors. The technology-heavy Nasdaq fell the most, while the S&P 500 also slipped. AI-related companies, which drove much of this year's market gains, saw heavy selling as investors questioned their high valuations. New economic data showed inflation remains stubborn, reducing hopes that the Federal Reserve will cut interest rates soon. Higher rates tend to hurt technology stocks most because they rely on future profits, which become less valuable when borrowing costs stay elevated. Outside the US, the picture was brighter. Major stock indexes in Europe and Asia posted gains, helped by strong corporate earnings and hopes for economic stimulus in China. Global investors shifted some money away from expensive US tech shares toward cheaper markets. The week highlighted a growing split: US markets are nervous about AI hype and inflation, while other regions are finding firmer footing. Investors will now watch next week's economic reports and Fed comments for clearer direction.