Nasdaq Drops 1% as AI Jitters Hit; Brent Above $100, Iran Offer Looms

U.S. markets saw the tech-heavy Nasdaq decline roughly 1% as investor concern about the sustainability of the artificial intelligence-led rally resurfaced, prompting profit-taking in several large-cap technology names.

The pullback in Nasdaq reflected questions over which companies will capture durable profits from AI investments and whether high valuations remain justified amid mixed corporate updates. Market participants pointed to an ongoing earnings season and macro data flows that have left traders wary of concentrated exposure to growth names.

At the same time, energy markets tightened after reports that Iran offered a proposal to reopen the Strait of Hormuz under conditions that the United States found insufficient, keeping supply-risk premiums elevated; Brent crude traded above $100 as flows through the critical waterway remained constrained.

Those developments had cross-asset implications: rising oil prices are feeding through to inflation expectations and are weighing on risk assets, while safe-haven and energy stocks have shown mixed performance. Bloomberg market summaries noted that uncertainty around Hormuz has contributed to a softer tone in U.S. equities.

Analysts warn the outlook is bifurcated — a correction in overextended AI names could be healthy for longer-term market structure, yet prolonged energy supply disruptions risk higher inflation and a more complicated policy backdrop. Major banks and commodity research teams have raised near-term oil forecasts in light of persistent transit risks, adding a further layer of uncertainty for markets.

Investors will watch upcoming corporate earnings, central bank commentary and any concrete diplomatic movement on the Strait of Hormuz for clues on whether markets stabilize or remain volatile. In the near term, risk management and sector rotation are likely to dominate portfolio decisions as markets price both AI-driven growth debates and geopolitical energy risks.