Global stock markets fall as AI chip stocks slide and oil rises

Global stock markets fell on Friday as another sell-off in AI stocks and computer chip makers unsettled investors, while oil prices continued to rise because of the conflict involving Iran.

The S&P 500 dropped as much as 1.4 percent before recovering slightly to trade 0.6 percent lower.

The Nasdaq Composite fell 1.3 percent, while the Dow Jones Industrial Average was little changed after swinging sharply between losses and gains.

Chip makers remained under pressure as investors questioned whether strong demand linked to artificial intelligence can be sustained.

The weakness spread across Asia, with markets in Taipei, Tokyo and Shanghai posting sharp losses and shares in Taiwan Semiconductor Manufacturing Co. also declined.

According to the report, investor sentiment was further affected by the launch of Moonshot's Kimi K3, a new open-source AI model from China.

The release has raised concerns that lower-cost AI models could reduce demand for advanced computer chips.

On Wall Street, Netflix fell 8.6 percent after reporting quarterly revenue below analysts' expectations, despite stronger profits. Intuitive Surgical also dropped more than 11 percent as investors reacted to concerns about slower growth in medical procedures.

European markets recorded smaller declines because they are less dependent on technology stocks.