Tech Selloff Drives Second Day of Stock Losses: Markets Wrap
(Bloomberg) — A slide in technology stocks dragged global markets lower for a second day as investors continued to pull back from the biggest beneficiaries of the artificial-intelligence boom.
Nasdaq 100 futures fell 0.4% after the index logged its steepest drop in nearly a month amid concerns over lofty valuations. Nvidia Corp. led declines among the Magnificent Seven group of heavyweights in premarket trading. Super Micro Computer Inc. plunged on disappointing results, while Advanced Micro Devices Inc. slipped after its update failed to impress.
Outside the technology sector, the equity selloff showed signs of easing, with S&P 500 futures trimming losses and futures on the Russell 2000 index of small-cap stocks little changed. Gold rose for the first time in four sessions. US Treasuries and the dollar were little changed ahead of a report from ADP Research on private employment.
“There has been way more nervousness than usual during the last rally, and that’s not a good sign,” said Alexandre Baradez, chief market analyst at IG in Paris. “The market was priced for perfection so that explains why emerging questions about rate cuts, liquidity, and valuations are having such an impact.”
The pause in the global stock rally came after the booming outlook for AI and expectations of continued Federal Reserve interest rate cuts sent the US benchmark up more than 35% from its April lows. Those gains, however, have become increasingly concentrated, prompting some Wall Street chiefs to describe a pullback as a healthy reset.
South Korea’s Kospi — a major AI play — slid more than 2% in Asia. Tech stocks also led losses in Europe.
The selling wiped out about $500 billion in combined market capitalization from the Philadelphia Semiconductor Index on Tuesday and a Bloomberg gauge of Asian chip stocks on Wednesday.
“We want to see a bit of rotation, we want to see a bit of profit taking, and we want to see investors distinguishing between the good and the not-so-good stories,” said Guy Miller, chief strategist at Zurich Insurance. “I don’t think it’s a breakdown at all. That’s healthy.”
ADP Research’s private-sector payrolls report ahead of the US open may have a bigger impact than usual on sentiment, due to limited visibility on the labor market amid the longest government shutdown on record. The figures are projected to show a modest increase in October after declines the prior two months.
With money markets pricing in around a 70% change of a Fed cut in December as officials look to support the labor market, an unexpected surprise may prompt a recalibration of expectations.
“If the ADP shows a significant decline, then Fed rate cut discussion will gain new momentum, which might be supportive for the stock market,” said Christian Stocker, a strategist at UniCredit SpA.
Corporate News:
Novo Nordisk A/S trimmed its forecast for a fourth time this year on lagging sales of its blockbuster drugs Wegovy and Ozempic, underscoring the urgency facing its new chief executive. Pinterest Inc. shares plunged after its revenue projections for the current quarter fell short of analysts’ estimates, a sign that the search platform’s advertising business may not be growing as quickly as expected despite the upcoming holiday shopping season. SoftBank Group Corp.’s Japanese mobile unit and OpenAI will launch AI services for local companies next year, seeking to realize real revenue in the face of growing concerns over sky-high valuations. Toyota Motor Corp.’s shares dropped the most since April after the carmaker’s annual profit guidance disappointed investors, a sign that the impacts of US President Donald Trump’s tariffs are still weighing on its bottom line. BMW AG said demand for the first model in a new generation of vehicles is exceeding expectations as the luxury-auto maker steps up the fight to meet growing competition in China. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.3% as of 6:21 a.m. New York time Nasdaq 100 futures fell 0.4% Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 fell 0.4% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1485 The British pound was little changed at $1.3019 The Japanese yen was little changed at 153.65 per dollar Cryptocurrencies
Bitcoin rose 1.3% to $101,523.04 Ether rose 2.6% to $3,297.47 Bonds
The yield on 10-year Treasuries was little changed at 4.08% Germany’s 10-year yield was little changed at 2.65% Britain’s 10-year yield was little changed at 4.43% Commodities
West Texas Intermediate crude rose 0.6% to $60.90 a barrel Spot gold rose 0.7% to $3,960.60 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Subrat Patnaik, Sujata Rao and Eman Abouhassira.
©2025 Bloomberg L.P.
