Tech Rout Eases & Oil Strength Caps Relief - Europe Market Wrap
Global stocks found some relief as the AI-driven selloff eased, although rising oil prices kept sentiment cautious. Nasdaq 100 futures slipped 0.1% after the index suffered its worst session since June, while S&P 500 futures fell 0.3%. Chipmakers posted modest premarket gains, while Meta extended losses and SpaceX climbed following reports of plans to become a wireless carrier. Treasuries surrendered some of the previous session's safe-haven gains, with the 10-year yield recording its biggest decline in more than a year. Corporate bond yield premiums widened to their highest since May 2025 as investors questioned whether AI revenues could justify heavy infrastructure spending. Oil continued to complicate the inflation outlook, with Brent crude reaching its highest since early May, while Gold and the Dollar were little changed. Investor caution remained elevated amid concerns over the sustainability of AI spending and growing stress in credit markets. Bank of America’s Michael Hartnett expects risk aversion to persist into November, arguing that markets have yet to fully price a potential Democratic victory in both chambers of Congress. Such an outcome could weigh on earnings growth
Story updates
Global stocks found some relief as the AI-driven selloff eased, although rising oil prices kept sentiment cautious. Nasdaq 100 futures slipped 0.1% after the index suffered its worst session since June, while S&P 500 futures fell 0.3%. Chipmakers posted modest premarket gains, while Meta extended losses and SpaceX climbed following reports of plans to become a wireless carrier. Treasuries surrendered some of the previous session's safe-haven gains, with the 10-year yield recording its biggest decline in more than a year.
Corporate bond yield premiums widened to their highest since May 2025 as investors questioned whether AI revenues could justify heavy infrastructure spending. Oil continued to complicate the inflation outlook, with Brent crude reaching its highest since early May, while Gold and the Dollar were little changed. Investor caution remained elevated amid concerns over the sustainability of AI spending and growing stress in credit markets. Bank of America’s Michael Hartnett expects risk aversion to persist into November, arguing that markets have yet to fully price a potential Democratic victory in both chambers of Congress.
Such an outcome could weigh on earnings growth by ending the current low-tax, low-regulation environment. European equities weakened, with the Stoxx 600 falling 0.6% after disappointing euro-area private-sector activity data. Kering slumped 13% as Gucci sales declined more than expected, while Volvo Car plunged 27% to a record low following a loss and warnings over deteriorating demand in China. In Asia, South Korea’s Kospi recovered from losses of as much as 4.1% to close 0.3% higher, while MSCI’s regional benchmark remained on course for its fourth consecutive weekly decline.