Stocks Waver as Rotation Gains Pace After AI Scare: Markets Wrap
(Bloomberg) — Global equities struggled for direction following a selloff in stocks sensitive to artificial-intelligence disruption that deepened a rotation into economically sensitive sectors. Gold reclaimed the $5,000-an-ounce mark.
S&P 500 contracts were little changed, while those for the small-cap Russell 2,000 index advanced 0.3%. Europe’s Stoxx 600 rose 0.1%, with more than 400 members posting gains. Novo Nordisk A/S sunk 17% after a disappointing sales outlook. Nasdaq 100 contracts nudged lower ahead of Alphabet Inc.’s earnings.
A rotation into small caps and economically leveraged shares picked up momentum as renewed fears around AI-driven upheaval rippled through markets. The latest selloff was sparked by a new automation tool from Anthropic PBC, with losses spilling over into financial services and asset managers.
“I don’t think the market has fully resolved whether this move was based on fear or fundamentals. What’s clear is that we’ve had a confidence break, really, at the category level,” said Stephanie Niven, portfolio manager at Ninety One. “Before convictions can be rebuild at that really important company level, we are seeing this kind of indiscriminate selling.”
The dollar and Treasury yields edged higher. Bitcoin hovered near $76,000. The yen extended losses against major peers as traders anticipated a victory for Prime Minister Sanae Takaichi’s Liberal Democratic Party in the weekend’s election.
Cautious trading amid renewed fears over disruption has added another layer of complexity to distinguishing AI winners from losers. With valuations stretched and earnings season under way, investors have punished companies that failed to live up to elevated expectations.
The latest example came from Advanced Micro Devices Inc., which slid 7% in premarket trading after issuing an underwhelming sales forecast. The stock has surged about 50% since October, compared with a largely flat performance over the same period for AI-chipmaking leader Nvidia Corp.
“High valuations and optimistic earnings expectations reduce the margin for error,” wrote Barclays Plc strategist Emmanuel Cau. “The good news, however, is that the latest pull-back has already removed froth, without panic.”
More broadly, he said stock prices would be supported by global growth re-accelerating and improving earnings.
“High valuations limit the cushion, but they are not extreme either, and backed by solid corporate fundamentals, while bonds aren’t that appealing to us,” the team writes in a note.
Corporate Highlights:
Novo Nordisk A/S shocked investors by forecasting a steep decline in sales this year, a sign of how intensifying price wars in obesity drugs and the Trump administration’s pressure on pharmaceutical prices will hit the company’s results. UBS Group AG posted profit which beat expectations in the fourth quarter, as the bank announced a $3 billion buyback program for 2026 with the potential for more. GSK Plc reported better-than-expected profit in the fourth quarter, buoyed by its HIV and asthma medicines. Credit Agricole SA fell short of analysts’ profit estimates for the fourth quarter as costs rose to revamp its Italian business and it set aside more money for souring loans and other risks. Infineon Technologies AG said it would ramp up spending on its technology for data centers, aiming to grow revenue as demand for artificial intelligence solutions picks up speed. Advanced Micro Devices Inc. shares tumbled in late trading after the chipmaker’s sales forecast underwhelmed investors, a sign that it’s not making the AI inroads that some on Wall Street anticipated. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 10:24 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average rose 0.2% The MSCI Asia Pacific Index was little changed The MSCI Emerging Markets Index was little changed Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro was little changed at $1.1812 The Japanese yen fell 0.6% to 156.72 per dollar The offshore yuan was little changed at 6.9411 per dollar The British pound was little changed at $1.3702 Cryptocurrencies
Bitcoin fell 0.2% to $76,010.76 Ether fell 1.3% to $2,253.34 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.28% Germany’s 10-year yield declined one basis point to 2.88% Britain’s 10-year yield was little changed at 4.52% Commodities
Brent crude rose 0.4% to $67.63 a barrel Spot gold rose 2% to $5,044.11 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jan-Patrick Barnert.
©2026 Bloomberg L.P.
