Stocks Hit by Software Selloff as Bitcoin Tumbles: Markets Wrap
(Bloomberg) — Another burst of heavy selling pummeled software stocks and crypto, with weak jobs data exacerbating an equity rout spurred by concern over the impact of artificial intelligence on valuations. Alphabet Inc. was the latest to drop after earnings. Bitcoin took one of its biggest tumbles yet.
While the S&P 500 was down about 1%, it pared losses amid a bounce in chipmakers. The Nasdaq 100 was still set for its worst three-day rout since April. The most-popular digital token sank below $70,000 in a plunge that cut its value nearly in half since October. Treasuries climbed, sending two-year yields to the lowest in almost a month. Silver plummeted as much as 18%.
The recent decline in all things related to AI coincided with persistent fears about whether massive investments on the technology will pay off. A clear example was the reaction to results from Google’s parent, which sank 3% after outlining an ambitious spending plan even as revenue beat estimates. Amazon.com Inc. reports earnings later Thursday.
Heavy selling is starting to put a visible dent in equity benchmarks whose ascent had pushed valuations to some of the highest levels since the 2000 dot-com peak. The Nasdaq 100 has seen more than $1 trillion wiped out since last Wednesday, the day Federal Reserve policymakers signaled reluctance to lower rates again anytime soon.
While losses in previous sessions were confined mostly to growth sectors, Thursday saw a broadening of selling pressure, with all 11 major industry groups in the S&P 500 falling and about two-thirds of the index’s members in the red. Its equally weighted version — one that strips out market value biases — dropped from an all-time high.
Bets on economic resilience have recently fueled gains in companies that tend to benefit from improving growth prospects, the latest data underscored the uneven labor market characterized by limited numbers of overall dismissals and lackluster hiring.
US job openings unexpectedly fell in December to the lowest level since 2020 and layoffs edged up. Companies announced the largest number of job cuts for any January since the depths of the Great Recession in 2009, according to data from Challenger, Gray & Christmas Inc. Menatime, jobless claims rose more than forecast last week.
“The latest labor figures reiterate that the US jobs market is not firing on all cylinders, a risk the Fed and investors will have to take seriously should further deterioration occur,” said Bret Kenwell at eToro. “Volatility could persist, particularly if near-term uncertainty increases.”
On the other side on the Atlantic, the European Central Bank kept interest rates unchanged as officials assess the economic toll of a rally in the euro and renewed trade unpredictability. The Bank of England came within a vote of cutting interest rates and predicted inflation will fall below its target, a closer-than-expected decision that revived hopes of a move next month.
Corporate Highlights:
Qualcomm Inc., the largest maker of smartphone processors, gave a lackluster revenue forecast for the current period, stoking concern that component shortages will hurt consumer demand by driving prices up. The shares dropped in extended trading. Arm Holdings Plc shares rebounded after analysts praised the chip designer’s latest quarterly report, which initially drew a tepid response from investors. Peloton Interactive Inc. provided a weaker-than-expected revenue forecast for the fiscal third quarter, disappointing investors who hoped a recent hardware revamp would spur a long-promised turnaround. ConocoPhillips is forecasting a cut to its crude production this year as oil prices slump and prime drilling sites in US shale fields grow scarce. Ralph Lauren Corp.’s quarterly report raised concerns that strategic investments and a sales miss in Europe could slow the high-end apparel company’s momentum. Estée Lauder Cos.’s outlook boost failed to reassure investors about the pace of the cosmetics conglomerate’s turnaround. Bristol Myers Squibb Co. forecast 2026 sales and profit above Wall Street’s expectations, a sign that the company’s newer medicines are helping stem the losses from its older drugs that are losing patent protection. Hims & Hers Health Inc. launched a cheaper copycat version of Novo Nordisk A/S’s new weight-loss pill. Cigna Group set the floor for its 2026 earnings outlook shy of Wall Street expectations as the health-care conglomerate revamps its drug benefit plans, a move the company has warned will drag on profits. Hershey Co. offered a better-than-expected 2026 outlook, saying higher prices and new products would bolster the candymaker’s performance. Bank of America Corp. — aiming to double the profit it makes from consumers — is revamping its approach to credit cards as the lender embarks on a plan to meet one of its most audacious financial targets set last year. KKR & Co. reported a drop in fourth-quarter profit, missing Wall Street estimates, as asset sales declined and the firm took a charge for one of its private equity funds in Asia. Crypto exchange Gemini Space Station Inc. said it plans to cut up to 25% of its workforce and wind down operations in the UK, European Union and Australia, citing a strategy to reduce costs and improve profitability. 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. Barrick Mining Corp. plans to spin off its top North American gold assets in an initial public offering later this year as part of a strategic reset by the Canadian metals producer. Shell Plc profits slumped in the fourth quarter, undershooting expectations as lower crude prices and a struggling chemicals business dented earnings. Spanish lender BBVA SA reported higher provisions in key markets such as Turkey and Mexico in the fourth quarter. BNP Paribas SA beat expectations and raised some targets, boosting Chief Executive Officer Jean-Laurent Bonnafe and his plan to prop up a lender that has long lagged peers. HSBC Holdings Plc is preparing to hand some bankers little or zero bonuses as the 160-year-old British lender seeks to emulate its Wall Street rivals with a more hard-edged, “eat-what-you-kill” stance. Some units at UBS Group AG’s investment bank have seen their bonus pools rise by as much as 20% for 2025, people familiar with the matter said. A.P. Moller-Maersk A/S plans to cut jobs and focus on cost discipline this year as the container giant seeks to insulate its earnings against deteriorating freight rates with Red Sea routes reopening. Vodafone Group Plc grew more slowly than expected in Germany, its largest market, bucking expectations of stronger growth after bringing on 1&1 AG as a wholesale mobile customer. Elliott Investment Management has increased its stake in Toyota Industries Corp. again as the activist investor ramps up efforts to block the Toyota group’s bid to take the company private. Baidu Inc. announced plans to issue its first dividend alongside a three-year stock buyback program of as much as $5 billion, moving to reward investors who’ve endured a multiyear retreat in the Chinese search leader’s market value. Hon Hai Precision Industry Co.’s revenue surged in January, suggesting demand for Nvidia Corp. servers remains resilient during a global wave of AI development. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.9% as of 12:07 p.m. New York time The Nasdaq 100 fell 0.9% The Dow Jones Industrial Average fell 0.8% The Stoxx Europe 600 fell 1% The MSCI World Index fell 0.9% Bloomberg Magnificent 7 Total Return Index fell 1.6% IShares Expanded Tech-Software Sector ETF fell 2.4% Philadelphia Stock Exchange Semiconductor Index rose 0.3% The Russell 2000 Index fell 0.7% S&P 500 Equal Weighted Index fell 0.6% Alphabet fell 3.1% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro was little changed at $1.1801 The British pound fell 0.8% to $1.3548 The Japanese yen was little changed at 156.87 per dollar Cryptocurrencies
Bitcoin fell 7.1% to $67,471.48 Ether fell 6.9% to $1,979.24 Bonds
The yield on 10-year Treasuries declined six basis points to 4.21% Germany’s 10-year yield declined two basis points to 2.84% Britain’s 10-year yield advanced one basis point to 4.56% The yield on 2-year Treasuries declined six basis points to 3.49% The yield on 30-year Treasuries declined six basis points to 4.86% Commodities
West Texas Intermediate crude fell 2.6% to $63.46 a barrel Spot gold fell 1.7% to $4,879.97 an ounce Xagusd Spot Exchange Rate – Price of 1 XAG in USD fell 13% to $76.60 –With assistance from Chris Nagi.
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