The FTSE 100 slid further into negative territory at midday as mounting concerns over artificial intelligence spending weighed heavily on investor sentiment across global markets.
Technology-linked stocks bore the brunt of the selloff, with traders growing increasingly anxious about whether surging AI infrastructure investment will translate into meaningful returns for shareholders.
Rolls-Royce Holdings (RR.L) was among the session’s worst performers, with the engineering giant’s shares tanking sharply as the broader risk-off mood took hold across London trading floors.
The blue-chip index has struggled for direction in recent sessions, with macroeconomic uncertainty and shifting sentiment toward high-growth technology bets continuing to unsettle portfolios.
AI spending fears have become a recurring theme in equity markets this year, as investors question the pace and scale of capital expenditure being committed by major technology companies worldwide.
The concern centres on whether the enormous sums being poured into AI data centres, chips, and infrastructure will generate sufficient revenue growth to justify current valuations across the sector.
Rolls-Royce, which has been one of the FTSE 100’s standout performers in recent years, found itself caught in the crossfire as sentiment toward growth-oriented industrials soured during the session.
The broader London market reflected a cautious mood seen across European bourses, with few sectors managing to buck the downward trend as sellers dominated midday trading activity.
Energy and mining stocks, which often act as a buffer against technology-driven selloffs, offered limited support to the index, providing little respite for fund managers seeking defensive positions.
Bond markets drew some attention as equity investors rotated toward safer assets, a pattern that has become familiar during periods of heightened uncertainty around the sustainability of AI-driven growth narratives.
Analysts have noted that the AI spending debate is unlikely to be resolved quickly, meaning volatility could persist for FTSE-listed companies with exposure to global technology supply chains and industrial contracts.
Rolls-Royce, whose engines power a significant portion of the world’s long-haul aircraft fleet, has also faced broader questions about civil aerospace demand trends alongside the day’s sharp share price move.
Market participants will be watching closely for any fresh commentary from major technology firms or central banks that could either calm or intensify fears around capital allocation in the AI sector.