Key Points
- U.S. technology stocks, particularly AI-related companies such as Nvidia, fell sharply on Wednesday.
- Gold and silver prices surged, with silver hitting a record high.
- Expectations of Federal Reserve rate cuts and geopolitical tensions in Venezuela drove the precious metals rally.
- President Trump ordered a blockade of Venezuelan oil tankers, which pushed oil prices higher.
Global stock markets declined on Wednesday, driven by a sell-off in U.S. technology shares amid growing fears of an AI bubble. Meanwhile, safe-haven assets like gold and silver soared as President Donald Trump’s new blockade of Venezuela and renewed hopes for Federal Reserve rate cuts sent investors scrambling for safety.
The tech-heavy Nasdaq Composite led the declines on Wall Street, falling 1.81%. The S&P 500 also dropped over 1%, with AI chip leader Nvidia tumbling 3.8%.
The slide came as investors grew increasingly concerned about the elevated valuations in the AI sector. “It does appear there is now real market fatigue in this singular AI infrastructure story,” said one chief investment officer.
While stocks stumbled, the action was hot in the commodities market. President Trump’s order to block sanctioned oil tankers from entering or leaving Venezuela raised supply concerns and pushed oil prices higher.
But the biggest moves were in precious metals. Silver prices hit a new record high, and gold rose for the seventh straight day. A combination of factors fueled the rally. Trump’s move in Venezuela created geopolitical uncertainty, which often drives investors to the safety of gold.
At the same time, comments from a senior Federal Reserve official hinting at future interest rate cuts made non-yielding assets such as gold and silver more attractive. The dollar also strengthened as traders weighed the different central bank moves happening around the world.
