U.S. stocks tumble as AI hype fades and oil rallies on Middle East tensions

Global equity markets fell sharply on Wednesday after a heavy sell‑off in technology stocks dragged U.S. indices down nearly 2 % and pulled other major markets lower. The decline coincided with a sharp rise in oil prices following President Donald Trump’s warning that the United States would hit Iran "very hard." The Nasdaq recorded its worst run of the year, with the SOX chip index down 3.6 % and major AI‑related shares losing momentum – Nvidia fell 3.8 % and Super Micro Computer dropped 28 %.

U.S. consumer inflation rose above 4 % in the latest CPI reading, well over the Federal Reserve’s 2 % target, while core goods inflation turned negative for the first time this year. In Japan, Governor Kazuo Ueda was hospitalized and will miss the Bank of Japan’s policy meeting, raising concerns about communication ahead of a likely 25‑basis‑point rate hike to 1.00 %.

Other market moves included South Korea slipping 5 %, China and Japan each down about 2 %, the yen weakening to 160.5 per dollar, oil gaining 2 % and gold falling 4 %. Analysts highlighted potential further volatility from developments in the Middle East, upcoming rate decisions in Turkey and Europe, and U.S. economic data releases.