Technology-heavy stock markets headed for their sharpest weekly decline in seven months amid concerns about the sustainability of the rally in AI stocks and weak Chinese trade data.
Europe’s benchmark index, the STOXX 600, fell 0.17% Friday morning, while US futures showed a slight recovery. However, the Nasdaq is down 2.8% on a weekly basis, its worst performance since April.
China’s exports fell 1.1% in October, the worst level since February. This situation, underlining the dependence on the US, sent chills down Asian markets. The Japanese Nikkei fell 1.2%, and the South Korean KOSPI fell 1.8%. SoftBank Group fell nearly 20% this week, while Bitcoin dropped 8% to $101,500. Profit-taking in AI stocks has accelerated in recent weeks. High spending plans and uncertain profitability rates of giants like Meta and Palantir have shaken investor confidence.
“This could be an early stage of a shift in market sentiment,” said Herald van der Linde, Head of Equity Strategy at HSBC Asia Pacific.
In an environment of uncertainty, bonds and gold have emerged as safe havens. US 10-year Treasury yields fell to 4.09% while gold traded above $4,000 per ounce.
Oil prices recovered slightly after a three-day decline, rising to $64 for Brent. However, soybean prices are poised to close the week lower due to China’s failure to fulfill its purchase promise.
