Stock Selloff Eases, Silver Bounces With Bitcoin: Markets Wrap
(Bloomberg) — A selloff in equities showed signs of easing as Friday’s session progressed, suggesting selling pressure was starting to abate after steep declines in US tech stocks. Precious metals also stabilized after a volatile start.
While sentiment remained fragile, Asian shares and US equity-index futures pared most of their initial losses. European stock futures edged up 0.1%, while contracts for the US pared their early weakness. That came after Wall Street gauges declined on Thursday, with the Nasdaq 100 suffering its worst three-day rout since April’s meltdown.
Investors remained wary of the technology sector with Amazon.com Inc. shares tumbling 11% in extended trading. The company plans to spend $200 billion on artificial intelligence this year, fueling concern that its colossal AI bet may fail to pay off in the long run.
Volatility showed up across assets with silver rising 3.1% after a 20% plunge Thursday, while gold gained 1.4%. Bitcoin too made a similar move, rising more than 3% after having earlier tumbled to nearly $60,000 — less than half its peak in October.
“Huge volatility across all assets is still hitting sentiment,” said Nick Twidale, chief market analyst at AT Global Markets. “It’s going to be a very long day for traders. Given the volatility we’ve seen and the overall sentiment is down, there’s further room for the rally to be sold into aggressively.”
There’s been no single cause of market turmoil like there was last April, when President Donald Trump’s trade war sent markets into a tailspin. Instead, it’s been a slow drumbeat of news that is sowing anxiety about valuations that many suspected had already run up too far, and causing investors to pull back all at once.
That was clear again Thursday, when the S&P 500 slid 1.2%, and the Nasdaq 100 fell 1.4%. Software stocks extended their tumble after Anthropic, an AI company, rolled out a new model that’s designed to carry out financial research, underscoring the competitive threat from the new technology.
“Investors are questioning their commitment to the pillars that have underpinned markets over the past six months: AI, crypto, and precious metals,” Tony Sycamore, market analyst at IG Australia, wrote in a note. “This raises the odds of a deeper unwind.”
MSCI’s gauge of Asia Pacific shares was flat, having tumbled as much as 1.3% earlier on Friday. An index of the region’s technology shares rose 0.2% and South Korea’s Kospi Index — a poster child for AI investments — slipped 1.4%. Earlier in the day, the gauge was down by 5.1%.
The overall weak sentiment pushed investors toward Treasuries, sending two-year yields to the lowest since October. The yield on the benchmark 10-year held at around 4.19% on Friday.
Meanwhile, investors are positioning for a victory for Japanese Prime Minister Sanae Takaichi’s Liberal Democratic Party at this weekend’s election by scooping up Japanese stocks and selling the yen and government bonds. The Nikkei 225 index in Japan rose 0.8%.
Traders were also paying attention to the volatile swings in precious metals. Silver lurched between losses and gains as a lack of liquidity led to wild swings in a market struggling to find a floor.
Even so, AI and the billions of dollars companies are pouring into it remained a key focus.
Four of the biggest US technology companies together have forecast capital expenditures that will reach about $650 billion in 2026 — a mind-boggling tide of cash earmarked for new data centers and the long list of equipment needed to make them tick, including AI chips, networking cables and backup generators. Returns on those investments and frothy valuations have sent shares lower in the past week.
“The tech correction is bringing valuations back to levels that include a healthier risk premium,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management. “I still think that there could be more to go, as investor sentiment was very positive until the middle of last week, but the speed of the decline in the past few days was sharp, so I am not surprised at some consolidation.”
Corporate Highlights:
Rio Tinto Group is walking away from talks to acquire Glencore Plc after the two sides failed to agree on valuation, scuttling a potential mega merger that would have created the world’s largest mining company. Blackstone Inc.-backed Liftoff Mobile Inc. postponed its initial public offering, according to people familiar with the matter, after tech stocks spiraled on concerns over the impact of artificial intelligence on operating companies. Roblox Corp. reported fourth-quarter users and bookings that beat analysts’ expectations thanks to a slate of hit games. Societe Generale SA launched a €1.46 billion ($1.7 billion) buyback program after posting fourth-quarter profit that beat estimates, as Chief Executive Officer Slawomir Krupa reinforced his pledge to focus on investor payouts. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 6:50 a.m. London time Nasdaq 100 futures fell 0.4% The MSCI Asia Pacific Index was little changed Hong Kong’s Hang Seng fell 1.2% The Shanghai Composite fell 0.2% Euro Stoxx 50 futures were little changed Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1799 The Japanese yen rose 0.1% to 156.81 per dollar The offshore yuan was little changed at 6.9397 per dollar The British pound rose 0.3% to $1.3572 Cryptocurrencies
Bitcoin rose 3% to $64,966.75 Ether rose 3.8% to $1,916.89 Bonds
The yield on 10-year Treasuries was little changed at 4.19% Japan’s 10-year yield advanced one basis point to 2.235% Australia’s 10-year yield declined three basis points to 4.83% Commodities
Spot gold rose 1.6% to $4,854.79 an ounce West Texas Intermediate crude rose 1.2% to $64.05 a barrel This story was produced with the assistance of Bloomberg Automation.
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