US Market: US markets saw a sharp decline, AI tensions weighed on investors.:AI-related uncertainty, inflationary pressures, and tariff ambiguity have impacted investors' risk appetite.

News Topical, Digital Desk : US stock markets saw sharp declines on Friday. Growing concerns about artificial intelligence (AI) and higher-than-expected inflation data weakened investor sentiment. Selling in tech stocks weighed on Wall Street's major indexes, with the Nasdaq Composite and S&P 500 heading for their biggest monthly declines since March 2025.

Pressure on tech stocks

Technology stocks have been under constant pressure this month. Investors are skeptical about high valuations and the future returns of large tech companies' massive AI investments. Chipmaker Nvidia shares fell 2.8%, following a decline of more than 5% in the previous session despite strong results. This indicates that risk-taking sentiment in AI-related stocks remains weak. Anthi Tsouvali, multi-asset strategist at UBS Global Wealth Management, said that many questions remain about the impact of AI on various industries and the future of US tech companies. She added that investor sentiment is now shifting toward traditional and relatively defensive sectors. Major Index Movements: The Dow Jones Industrial Average fell more than 1 percent during the session, while the S&P 500 declined more than 0.6 percent. The Nasdaq Composite fell more than 0.7 percent. If this trend continues, the Dow Jones' nine-month streak of consecutive gains could be broken.

Inflation and tariffs also impact the market. The US Producer Price Index (PPI) rose more than expected in January, strengthening expectations of higher inflation in the coming months. Uncertainty surrounding tariffs is also contributing to market volatility. President Trump imposed a temporary 10% global tariff after the US Supreme Court struck down most of the tariffs imposed through 2025. Brokerage UBS downgraded its rating on US equities to "neutral," citing high valuations.

Sector and stock movements : The Philadelphia Semiconductor Index fell 2% during the session. Shares of cloud security company Zscaler fell 14%. Netflix jumped 9%, while Warner Bros. Discovery fell 2%. Paramount Skydance rose 4.7%. Block Inc. surged 16% after announcing it would cut over 4,000 jobs. Dell Technologies surged 16.6%, driven by expectations that its AI server business will double its earnings. Overall, decliners far outnumbered gainers. Market uncertainty related to AI, inflationary pressures, and tariff ambiguity have limited investors' risk appetite.