Sharp drops for AI stocks overwhelm markets worldwide as oil prices jump

An options trader works on the floor of the New York Stock Exchange on 7 January 2026. An options trader works on the floor of the New York Stock Exchange on 7 January 2026. The latest shudder for stocks in the AI industry pulled markets lower worldwide on Thursday, while oil prices hit their highest levels since May on worries about the war with Iran . The S&P 500 fell 1.2% for its worst day since July, while the Nasdaq composite tumbled 2.6%. The weakness for tech stocks was so overwhelming that it masked strength for the rest of the US market, in which the majority of stocks actually rose.