AI selloff tests global markets from New York to Taipei

thestar.com.my —

A rout in technology stocks driven by fading confidence in the AI trade is testing the resilience of global financial markets, with traders on edge after a sharp selloff. The tech-heavy Nasdaq 100 plunged over 6% on Thursday before recovering nearly 2% on Friday. Wall Street's VIX volatility index rose above 28 on Thursday, its highest since late March, and has surged over 40% this week. The cost of insuring debt for AI firm CoreWeave spiked past 1,000 basis points into distressed territory, while investors have sought safety in US dollars and cash funds. Bond markets remain calm, with the MOVE index slipping back from a six-month high and US swap spreads stable. Policymakers have long warned of risks from an AI boom unraveling, though stress indicators are flashing amber rather than red.


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