Stocks Fall as AI Jitters Return and Oil Rallies: Markets Wrap
(Bloomberg) — A rebound in the artificial intelligence trade sputtered after the dismal debut of a South Korean data center firm revived worries about whether the technology’s spending boom can last. Brent crude hit a five-month high.
S&P 500 futures fell 0.2% as a poor reception for Elice Inc. in Seoul sapped appetite for risky assets. The AI-infrastructure provider plunged 32%, suffering the country’s worst opening day for a sizable company. Nasdaq 100 contracts were down 0.6%. CoreWeave Inc. dropped 4.4% in premarket trading, while chipmakers resumed their downward slide.
Treasuries caught fresh haven bids despite climbing oil prices, with 10-year yields dropping two basis points to 5.12%. Brent crude topped $111 a barrel for the first time since May as traders weighed the risk of further Iranian attacks in the Strait of Hormuz. The dollar fell.
Elice’s poor reception echoed the AI funding concerns brought to the fore by the abandoned IPO of Australia’s Firmus Grid Ltd. barely two weeks ago. Those worries are also evident in debt markets, with SoftBank Group Corp.’s credit risk rising to the highest level in nearly four years on Tuesday.
“Concerns surrounding AI-related data center and infrastructure investment have been building for several days,” said Roger Lee at Cavendish. “The market probably needs some reassurance that the huge capex investment is generating a return. That is hard to see at the moment.”
Investors are now waiting for results from the biggest AI spenders for clues on how long the vast outlays can continue and at what pace. SpaceX is expected to report after the close on Tuesday, followed by Meta Platforms Inc. tomorrow.
Traders will also want to see whether Netflix Inc. can produce hit movies and TV series again to turn around a $135 billion slide in market value this year.
Tuesday’s risk-off mood extended across regions. MSCI Inc.’s benchmark for Asia touched its lowest level since July, with South Korea’s Kospi index falling 3.7%. Industrial goods and services, along with mining stocks, pulled Europe’s Stoxx 600 0.6% lower.
Markets have already begun to price in a slowdown in earnings growth, said Mathias Heim, chief investment officer at Belle Capital.
“A return to the narrative of ever-higher capex guidance looks unlikely at this stage,” Heim said. “I would expect a period of digestion rather than a sustained rebound: slower growth for AI capex beneficiaries and potentially continued stress for highly leveraged neocloud providers.”
Bond markets, meanwhile, received a boost from record demand at an auction of 20-year Japanese debt. French bonds remained under pressure, with the 10-year yield premium over safer German debt rising to 150 basis points, a level last seen on Oct. 5.
“We see opportunities where higher sovereign bond yields better compensate investors for risk without signaling weaker fundamentals,” the BlackRock Investment Institute said in a note. Yet, the sharp selloff in French government bonds shows “selectivity is key.”
What Bloomberg Strategists Say:
“Fundamentals remain strong enough to support equity dip-buying, with the latest scare more financing- than demand-driven. But investors are reassessing exposures and hedges in favour of quality.”
Corporate Highlights:
General Electric Co. raised its full-year outlook amid strong aircraft engine demand, in a sign that air travel has yet to retreat despite resurgent jet fuel prices. Amazon.com Inc. said it will invest more than €16 billion ($17.9 billion) next year in Germany for operations including data centers, satellite program and Prime Video media production. Tencent Holdings Ltd., Alibaba Group Holding Ltd. and ByteDance Ltd. have ordered more than 3 million new Nvidia Corp. graphics cards, Reuters reported, citing people familiar with the matter. ABB Ltd. reported third-quarter orders that surpassed expectations after demand for electric components used by data centers and utilities surged. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.2% as of 7:10 a.m. New York time Nasdaq 100 futures fell 0.6% Futures on the Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 fell 0.6% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1211 The British pound rose 0.3% to $1.3347 The Japanese yen rose 0.2% to 158.15 per dollar Cryptocurrencies
Bitcoin fell 0.5% to $81,514.56 Ether fell 0.5% to $2,386.88 Bonds
The yield on 10-year Treasuries declined one basis point to 5.13% Germany’s 10-year yield declined three basis points to 3.43% Britain’s 10-year yield was little changed at 5.43% Commodities
West Texas Intermediate crude rose 5.2% to $109.08 a barrel Spot gold fell 0.4% to $4,123.35 an ounce This story was produced with the assistance of Bloomberg Automation.
©2026 Bloomberg L.P.
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