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European shares fell sharply on Friday as a global sell-off fueled by concerns over artificial intelligence stocks spread from Wall Street to Asia and Europe. Fears of curbs on AI data-center spending have added to investors' concerns after Democrats won control of both chambers of the US Congress. The pan-European STOXX 600 index dropped 1.6% in early trading, wiping out its gains for the week. Most major European markets fell more than 1%, with media, healthcare and retail stocks leading the declines. European markets had previously weathered the week's turbulence better than their Asian and US counterparts because of their smaller exposure to AI stocks.
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