Rising crude prices and energy supply risks may pressure tech stocks as firms ramp up artificial intelligence investments.
Brent crude neared $100 last week before retreating as U.S.-Iran tensions eased temporarily, but uncertainty over the conflict persists. The oil spike compounds concerns over Big Tech’s $725 billion AI spending push, raising fears of prolonged market volatility.
Last week’s rally marked a rare convergence of negative factors, including energy shortages and geopolitical risks. Prior to the retreat, oil prices had climbed steadily, adding pressure to sectors reliant on stable energy costs.
The outlook for equities has weakened as investors weigh the impact of higher input costs on tech firms’ ambitious AI infrastructure investments.