A crisis of confidence in artificial intelligence defined the trading week of June 23–27. The question that investors had been quietly harboring — when will the hundreds of billions committed to AI infrastructure translate into earnings? — surfaced with force, triggering a sharp rotation out of technology shares. The Nasdaq Composite fell 4.6% on the week while the Dow Jones Industrial Average rose 0.6%, a divergence that illustrated the growing unease over whether AI capital expenditure can be sustained at current valuations.

Equities

In the United States, Alphabet shed roughly $270 billion in market capitalization after losing two senior AI researchers within 48 hours. Chip stocks fell further on Thursday after Bloomberg reported that OpenAI is weighing a delay of its initial public offering to 2027, citing market volatility and the poor reception given to recent technology listings. The S&P 500 slipped nearly 2% to close around 7,354, while the Russell 2000 edged 1% higher, reinforcing the rotation from large-cap growth into cyclical and defensive names. Perspective is warranted: the Nasdaq remains up roughly 10% year-to-date. European equities proved more resilient, with the STOXX 600 ending the week virtually unchanged, while Asian markets fared worse: the Nikkei 225 lost 3.5% as chip exporters bore the brunt, and South Korea's KOSPI was the region's hardest hit as the sector repricing ran deepest there.

Rates & Credit

Fixed income offered measured shelter. The US 10-year Treasury yield eased roughly seven basis points to close near 4.37%, aided by a PCE inflation reading that came in line with expectations. Germany's 10-year Bund settled near 2.92%, approaching its lowest level since mid-March, after preliminary PMI data showed German private-sector activity contracting at its fastest pace since 2024. Credit markets stayed orderly: investment-grade spreads held near 80 basis points, suggesting participants read the equity sell-off as sector-specific rather than a systemic threat to corporate balance sheets.

Foreign Exchange

The dollar held firm across the major pairs. EUR/USD settled near 1.1390, finding limited support despite softer Bund yields. USD/JPY traded around 161.80 as the Bank of Japan's accommodative stance continued to weigh on the yen. Sterling held near 1.34 against the dollar. Among emerging market currencies, commodity-linked names faced headwinds from plunging oil prices, while the Chinese yuan remained range-bound as Beijing maintained near-term stability in the exchange rate.

Commodities & Gold

Crude oil posted its worst weekly performance in months. Brent fell to approximately $72 per barrel — a decline of more than 10% on the week — after reports of meaningful progress toward a US-Iran peace agreement raised the prospect of additional supply returning to market. WTI moved in sympathy. Gold slipped roughly 3% to around $4,040 per troy ounce, its fourth consecutive weekly decline, as dollar strength and receding safe-haven demand weighed on the metal despite the wider equity turbulence. Copper edged lower on the back of weaker European and Asian growth signals.

The Week Ahead

The week ahead is short, with US markets closed Friday for Independence Day. Federal Reserve Chair Kevin Warsh speaks Wednesday in Lisbon — any signal on the pace of policy normalization will be closely parsed. The headline release is Thursday's June nonfarm payrolls report, published a day early; the consensus sits at 172,000 new jobs, and a meaningful deviation in either direction will sharpen expectations heading into September. Any fresh AI-sector headlines could extend the technology sector's unsettled mood into a second week.