Stocks Set for Worst Day Since July as Bonds Rally: Markets Wrap
(Bloomberg) — A selloff in technology giants and escalating Middle East hostilities drove stocks toward their worst session since July, pushing global investors toward the safety of bonds.
Brent oil topped $112 as deadly attacks in Saudi Arabia heightened supply fears. Meta Platforms Inc. sank 7% and its credit risk hit a record high as plans to boost capital spending reignited fears that tech firms will issue more debt to finance the artificial-intelligence buildout. The S&P 500 fell 1.4%. The Nasdaq 100 lost 2.8%. A gauge of chipmakers dropped 6.3%.
Defensive strategies gained, though a rally in health-care shares faded as Moderna Inc. plunged. The rush for shelter revived the haven status of Treasuries, outweighing worries about inflationary pressures stemming from high energy costs. Ten-year yields fell 15 basis points to 4.97%. The Japanese yen and the Swiss franc rose.
“Tech stocks came under pressure amid renewed AI valuation fears. The rebound in energy prices contributed to the risk-off tone,” said Ian Lyngen at BMO Capital Markets. “Treasuries have emerged as a primary beneficiary.”
Following an extraordinary run in tech stocks, markets are becoming more demanding around evidence of the payoff from AI investments and worries about the sustainability of that spending amid higher rates, according to James McCann at Edward Jones.
“We remain constructive on large-cap stocks,” he said. “However, investors should look to ensure that they have good diversification in portfolios.”
Meta’s results kicked off a technology earnings season that’s likely to focus on runaway AI expenditures — and attempts by companies to get a return on investment. Alphabet Inc., Microsoft Corp. and Amazon.com Inc., three of the other biggest spenders on data centers, are slated to report next week.
Blackstone Inc. President Jon Gray said investors don’t need to worry that the boom in AI will turn into a bubble, just days after billionaire Ken Griffin said he fears the industry was “almost certainly” headed in that direction.
“When you think about a bubble, you think about building capacity and then hoping the demand comes,” Gray told Bloomberg Television after the firm reported its third-quarter results. “With AI, you’re building capacity, and you’re hoping you can keep up with the demand.”
Elsewhere, Chinese stocks were dragged into a bear market, with $2.4 trillion lost since a peak in May, as a protracted slump in consumption and mounting doubts over the profitability of AI companies turn them into one of the world’s worst performers.
Meantime, French bond stress deepened as spreads widened to a 15-year high, with a broad flight from risk and the threat of another round of weekend of protests reinforcing the country’s status as the weak link in global markets.
Corporate Highlights:
SpaceX is working with Apollo Global Management, Nvidia Corp. and dozens of other firms on a new partnership program to deploy and improve its Grok AI systems, part of a bid to bolster business adoption of its artificial-intelligence offerings. Tesla Inc. pulled back its spending plans after investment last quarter trailed expectations, a notable surprise in a quarter that also saw the firm beat analysts’ profit estimates. International Business Machines Corp. posted consulting revenue that missed Wall Street estimates, disappointing investors who have been worried about a broader shift in corporate technology spending. Bill Ackman called on the Trump administration to release Fannie Mae and Freddie Mac from conservatorship, warning that a Democrat-controlled government could weaponize the entities against Republicans. Procter & Gamble Co.’s sales and profits beat Wall Street expectations, showing the Tide-owner’s limited price hikes that are successfully drawing constrained customers have not come at the expense of earnings. Lockheed Martin Corp. lifted its full-year outlook as the company’s missile systems portfolio was buoyed by rising global defense spending. Some of the main moves in markets:
Stocks
The S&P 500 fell 1.4% as of 1:13 p.m. New York time The Nasdaq 100 fell 2.8% The Dow Jones Industrial Average fell 0.3% The MSCI World Index fell 1.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1225 The British pound was little changed at $1.3401 The Japanese yen rose 0.8% to 156.88 per dollar Cryptocurrencies
Bitcoin fell 4.2% to $81,098.73 Ether fell 4.7% to $2,374.64 Bonds
The yield on 10-year Treasuries declined 15 basis points to 4.97% Germany’s 10-year yield declined nine basis points to 3.33% Britain’s 10-year yield declined five basis points to 5.33% Commodities
West Texas Intermediate crude rose 2.1% to $99.17 a barrel Spot gold fell 2.4% to $4,039.76 an ounce ©2026 Bloomberg L.P.
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