Stocks Trim Losses, Silver Steadies After Tumble: Markets Wrap
(Bloomberg) — Equities and cryptocurrencies regained some stability after early losses in Asian trading, indicating that selling pressure may be easing following steep declines in US tech stocks. Precious metals also stabilized after a volatile start.
While sentiment remained weak, Asian shares and US equity-index futures pared most of their losses at Friday’s open. Silver erased a 9.6% tumble to rise 2.5%, a steep recovery after a 20% plunge in the prior session. Bitcoin made a similar move, having earlier tumbled to nearly $60,000 — less than half its peak price in October.
Following a sharp selloff on Wall Street on Thursday, 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, worrying investors that its colossal AI bet may not pay off in the long run.
“Huge volatility across all assets is still hitting sentiment. I think it’s going to be a very long day for traders,” said Nick Twidale, chief market analyst at AT Global Markets. “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 like there was last April when President Donald Trump’s trade war sent markets into a fearful 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 on Thursday, when the S&P 500 slid 1.2%, its third straight daily decline, and the Nasdaq 100 extended its deepest slide since April. Software stocks extended their tumble after Anthropic, an artificial-intelligence company, rolled out a new model that’s designed to carry out financial research, underscoring the competitive threat from the new technology.
What Bloomberg strategists say…
The early shedding of exposure across assets is taking a breather with Bitcoin actually unwinding most of its early swoon. But a lot of damage is being done to portfolios and it is only the first week of February.
— Mark Cranfield, MLIV strategist. For full analysis, click here.
The tech-heavy Nasdaq has seen more than $1 trillion wiped out since Federal Reserve policymakers signaled last week reluctance to lower rates again anytime soon.
“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 Asian shares fell 0.2%, having tumbled as much as 1.3% earlier. Futures contracts for the Nasdaq 100 Index dropped 0.5%, halving earlier losses. MSCI’s gauge for Asian technology shares rose 0.2%, having slumped more than 2% earlier Friday.
The overall weak sentiment pushed investors toward Treasuries, sending two-year yields to the lowest in almost a month during New York trading. Treasuries stabilized during Asian hours with the yield on the benchmark 10-year trading at around 4.18% on Friday.
Traders were also paying attention to the volatile swings in the precious metals markets. Silver lurched between losses and gains as a lack of liquidity led to wild swings in a market struggling to find a floor. Gold did the same. After tumbling as much as 2.6% earlier, the yellow metal gained 0.8% to $4,820 an ounce.
Even so, artificial intelligence 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 artificial intelligence 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. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 12:25 p.m. Tokyo time Japan’s Topix rose 0.7% Australia’s S&P/ASX 200 fell 2% Hong Kong’s Hang Seng fell 1.4% The Shanghai Composite was little changed Euro Stoxx 50 futures were little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1787 The Japanese yen rose 0.2% to 156.76 per dollar The offshore yuan was little changed at 6.9398 per dollar Cryptocurrencies
Bitcoin rose 2.2% to $64,499.42 Ether rose 2.3% to $1,889.66 Bonds
The yield on 10-year Treasuries was little changed at 4.18% Japan’s 10-year yield declined 1.5 basis points to 2.210% Australia’s 10-year yield declined two basis points to 4.83% Commodities
West Texas Intermediate crude rose 0.2% to $63.42 a barrel Spot gold rose 0.6% to $4,809.82 an ounce This story was produced with the assistance of Bloomberg Automation.
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