Tech Slide and Oil Rally Spur Flight to Treasuries: Markets Wrap
(Bloomberg) — Stocks slid in a broad retreat from riskier assets as a slate of technology earnings fell short of elevated expectations and escalating hostilities in the Middle East pushed oil prices higher. Treasuries rallied on haven demand.
Nasdaq 100 futures fell 1.6%, threatening to erase much of the index’s 2.2% gain this week. S&P 500 contracts dropped 0.9%. A disappointing outlook from chip-equipment maker Lam Research Corp. sent its shares more than 8% lower in early trading. Tesla Inc. slipped 3.7% after cutting back on spending plans.
Brent neared $112 a barrel as the US ordered some diplomats to leave Saudi Arabia over the threat from Houthi militants. Bitcoin posted its biggest drop in two weeks. Treasuries gained, pushing 10-year yields down nine basis points to 5.03%. The stress in French bond markets deepened. The yen hit its highest level against the dollar this month.
The latest round of corporate reports is testing whether earnings can keep the AI trade on track in the face of growing concerns that spending on data centers and computing capacity will take longer to generate returns and is becoming more expensive to fund. The bar is high, as even Meta Platforms Inc.’s shares fell despite showing evidence that its investments were starting to pay off.
“The message seems increasingly clear: the market is still willing to reward heavy AI investment, but is becoming much more demanding about returns,” said Santiago Mateo, head of equity at CaixaBank AM. “Investors want evidence that investment is translating into stronger growth, better monetization and ultimately earnings.”
Europe’s smaller exposure to technology didn’t spare it from the equity selloff. The Stoxx 600 fell 0.7%, with banks and mining stocks leading declines. Birkin bag maker Hermès International SCA dropped more than 5% after reporting no sales growth in the region that includes China.
Meanwhile, Chinese stocks entered bear-market territory. The CSI 300 Index closed 1.8% lower on Thursday, bringing its total losses from a high in June to 20%. Gauges of major Chinese companies and tech firms also plunged in Hong Kong, with a monthslong selloff showing few signs of abating.
German bunds were bid higher in Europe, while French yields continued their advance. The premium on French 10-year yields over their German counterparts reached 175 basis points, the highest since 2011.
With no big tech earnings due for another week, the rotation out of semiconductors and other AI-related stocks is set to continue, said Roberto Scholtes at Singular Bank.
“The dominant market dynamic in recent weeks has been the unwinding of AI-related positions by hedge funds,” Scholtes said. “I expect this trend to persist for a while, unless we see a substantial decline in bond yields triggered by a short squeeze, or major geopolitical developments.”
What Bloomberg Strategists Say…
“Current spreads on France are a reflection of extreme fears, meaning the market isn’t trading on fundamentals alone. Given the most extreme of concerns is who is ultimately elected president, and traders won’t have an answer to that question until next April at the earliest, we are in for a prolonged period of turmoil.”
— Ven Ram, Macro Strategist. Click here for the full analysis.
Corporate Highlights:
Meta Platforms Inc. said it has agreed to spend about $825 billion in the future on various leases and contracts, many of them related to computing power and infrastructure for artificial intelligence. The Pentagon plans to buy at least 850 additional Lockheed Martin Corp. F-35 fighter jets, in what would be the biggest contract in the program’s quarter-century history. Blackstone Inc. reported a drop in third-quarter income as surging energy prices stoked inflation and higher interest rates subdued dealmaking. Barclays Plc said it’s cutting 5,000 jobs, or about 5% of total headcount, as part of a “technology-enabled” effort to reduce costs as it adopts artificial intelligence across the bank. The Chinese AI pioneer DeepSeek has raised about 100 billion yuan ($15 billion) in its latest fundraising round, one of the country’s largest ever. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.9% as of 8:34 a.m. New York time Nasdaq 100 futures fell 1.6% Futures on the Dow Jones Industrial Average fell 0.6% The Stoxx Europe 600 fell 0.7% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.2% to $1.1205 The British pound fell 0.2% to $1.3370 The Japanese yen rose 0.6% to 157.17 per dollar Cryptocurrencies
Bitcoin fell 3.5% to $81,636.23 Ether fell 3.7% to $2,398.42 Bonds
The yield on 10-year Treasuries declined nine basis points to 5.03% Germany’s 10-year yield declined seven basis points to 3.35% Britain’s 10-year yield declined two basis points to 5.35% Commodities
West Texas Intermediate crude rose 2.3% to $99.42 a barrel Spot gold fell 1.6% to $4,073.67 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Ruhell Amin and Subrat Patnaik.
©2026 Bloomberg L.P.
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