Tech Selloff and Middle East Tensions Trigger Treasury Rally as Oil Surges - US Market Wrap
Global stocks tumbled as heavy losses among major technology companies and escalating conflict in the Middle East prompted investors to seek safety in government bonds. Brent crude climbed above $113 a barrel after deadly attacks in Saudi Arabia heightened concerns about potential supply disruptions. The S&P 500 fell 1.2%, while the Nasdaq 100 dropped 2.9% and a key semiconductor index plunged 6.7%. Meta Platforms led the technology selloff, with its shares sliding 7% as plans to increase capital expenditure revived concerns about the growing cost of the artificial intelligence boom. The company’s credit risk also reached a record high, reflecting fears that technology firms may need to take on more debt to fund their expanding AI infrastructure. Investors are increasingly questioning whether the enormous sums being invested in AI will generate sufficient returns. The flight to safety drove US Treasuries to their strongest rally in more than a year, with 10-year yields falling 15 basis points to 4.97%. Meta’s results marked the start of a crucial technology earnings season, with investors focused on rising AI spending and the prospects for returns on investment. Alphabet, Microsoft
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Global stocks tumbled as heavy losses among major technology companies and escalating conflict in the Middle East prompted investors to seek safety in government bonds. Brent crude climbed above $113 a barrel after deadly attacks in Saudi Arabia heightened concerns about potential supply disruptions. The S&P 500 fell 1.2%, while the Nasdaq 100 dropped 2.9% and a key semiconductor index plunged 6.7%. Meta Platforms led the technology selloff, with its shares sliding 7% as plans to increase capital expenditure revived concerns about the growing cost of the artificial intelligence boom.
The company’s credit risk also reached a record high, reflecting fears that technology firms may need to take on more debt to fund their expanding AI infrastructure. Investors are increasingly questioning whether the enormous sums being invested in AI will generate sufficient returns. The flight to safety drove US Treasuries to their strongest rally in more than a year, with 10-year yields falling 15 basis points to 4.97%. Meta’s results marked the start of a crucial technology earnings season, with investors focused on rising AI spending and the prospects for returns on investment.
Alphabet, Microsoft and Amazon, three of the largest investors in data centres, are due to report results next week, putting their spending plans under close scrutiny.