Markets Face More Turbulence as Investors Adjust to New AI Reality

US stocks have suffered sharp selloffs as investors reassessed the outlook for artificial intelligence investment and data center construction.

US technology stocks rebounded in premarket trading after a sharp selloff pushed the Nasdaq Composite into correction territory. [Photo: Cloudfare X]

However, early trading on Friday showed signs of a rebound, with technology shares and Nasdaq futures recovering ahead of the latest US employment report, Rupert Steiner reported for Barron's Daily.

The Nasdaq Composite plunged 5.5 percent on Thursday, entering correction territory after concerns about the future of AI investment triggered a broad retreat from technology stocks.

The decline also dragged down the S&P 500 and the Dow Jones Industrial Average.

Investors began buying shares again before Friday’s market open, pushing Nasdaq futures higher. S&P 500 futures were also slightly positive, while Dow futures remained under pressure.

Nvidia, one of the biggest beneficiaries of the AI boom, rebounded in premarket trading after losing 9.3 percent on Thursday.

Its shares had briefly fallen below $200 for the first time since July 30.

Cloudflare was another notable premarket mover after reporting earnings following Thursday’s closing bell. Its shares rose as investors responded to the company's results.

The rebound offered some relief after the previous day's market turmoil, but uncertainty remained over the pace of AI investment, the construction of data centers and the potential impact of new regulations.

Investors were also awaiting the latest US employment figures for clues about the health of the economy and the Federal Reserve’s future interest-rate decisions.