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Tech-led equity rout weighs on global markets

Global equities extended losses on Thursday, as concerns over stretched valuations in artificial intelligence and technology stocks triggered a broad sell-off across equity markets. US indices posted sharp declines led by tech heavyweights on Wednesday, while disappointing corporate earnings and a historic spike in American job cuts added to risk aversion. European stocks also closed lower amid ongoing sector weakness and mixed macroeconomic releases. Asia-Pacific markets tracked Wall Street’s slide on Thursday, with further pressure from renewed US-China tensions and underwhelming Chinese trade data. Gold prices were stable late in the week, trading around USD 4000 per ounce, while US Treasury yields remained near 3.6% for the 2-year and 4.1% for the 10-year note.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

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Major US stock indices posted sharp losses on Thursday as concerns grew over lofty valuations, particularly among technology firms focused on artificial intelligence. The Dow Jones Industrial fell by 0.8% to 46,912.30 points, the S&P 500 declined 1.1% to 6720.39 points and the Nasdaq 100 dropped 1.9% to 25,130.04 points, with significant declines seen in shares of Salesforce, Nvidia and AMD. Quarterly results from companies such as Qualcomm and Duolingo disappointed investors, while Snap and Lyft rose on strong performance and new partnerships.

US job cuts surge to 22-year October high

US companies announced 153,074 job cuts in October, representing a 183% increase from September and a rise of 175% from the same month last year, according to data released on Thursday by outplacement firm Challenger, Gray & Christmas. This volume marks the highest for any October since 2003 and contributes to the worst year for layoffs since 2009, with technology firms accounting for 33,281 cuts as the sector restructures amid widespread AI adoption. Despite the elevated layoff numbers, state-level jobless claims and payrolls data have not yet reflected the same level of deterioration, although Federal Reserve officials remain concerned about a softening labour market.

Tesla shareholders back Musk’s USD 1 trillion pay

Tesla confirmed on Thursday that shareholders approved Chief Executive Elon Musk’s USD 1 trillion pay package, with more than 75% of voting shares in favour at the annual meeting in Austin, Texas. The controversial plan, introduced in September, ties 12 tranches of stock awards to ambitious market capitalisation and operational milestones, potentially boosting Musk’s stake from 13% to 25% if targets are met. Shareholders also considered, but did not finalise, a proposal allowing Tesla to invest in Musk’s AI startup, xAI.

Asia equities face weekly drop on tech reversal

Asian stock markets declined on Friday, heading for notable weekly losses due to a renewed global sell-off in technology shares and disappointing Chinese trade data. Japan’s Nikkei 225 was down 1.1% and Korea’s Kospi slid 1.7%, dragged down by sharp falls in semiconductor and technology stocks such as SoftBank and Samsung Electronics, as worries over unsustainable sector valuations grew. That caution also pressured Hong Kong stocks with the Hang Seng Index 1.1% lower, while mainland China’s CSI 300 was trading down 0.2%. Australia’s S&P/ASX 200 fell 0.7%. Investor sentiment was further weighed by escalating US-China tensions, including Washington’s move to block Nvidia from selling certain AI chips to China and Beijing’s plans to ban foreign AI chips in government data centres.

China’s export slump deepens on tariffs

Macroeconomic data also soured the mood on Asian markets. China’s exports declined by 1.1% in October, marking the sharpest fall since February, as fresh tariffs imposed by US President Donald Trump significantly dented demand from the United States, according to data released on Friday. The drop follows an 8.3% rise in September and comes amid a broader slowdown, with exports to the US tumbling by 25% year-on-year, while shipments to the European Union and Southeast Asia rose only modestly. The decline is due to both front-loading ahead of tariff deadlines and softer demand globally, with China’s trade surplus narrowing to USD 90.07 billion during the period. Imports grew by just 1%, highlighting continued weak domestic demand, while policymakers are expected to emphasise fiscal support in early 2026 to counter ongoing external pressures.

Bank of England holds rates in narrow vote

The Bank of England held its key interest rate at 4% on Thursday, with a slimmer-than-expected 5-4 majority, as policymakers opted for caution ahead of the government’s Autumn Budget later this month. The decision comes as UK inflation remained steady at 3.8% in September for the third consecutive month, with the central bank noting that inflation has likely peaked and disinflation is progressing due to subdued economic growth and softening labour market conditions. Markets now anticipate that rate cuts could begin as soon as December or in February if inflation and wage growth continue to moderate. The upcoming Autumn Budget is expected to include tax increases, which could further dampen inflation by constraining consumer demand, setting the stage for potential policy easing next year.

German industrial production rebounds in September

German industrial production rose by 1.3% in September following a 3.7% decline in August, according to data released by the Federal Statistical Office on Thursday. The rebound was largely driven by a sharp recovery in the automotive sector, which grew by 12.3% after factory closures and production changeovers had pulled the previous month’s figures down by 16.7%. Despite gains in computer, electronic and optical products, total output remained 1% below the previous year’s level, while energy-intensive industries recorded only a modest 0.1% monthly increase. Quarter on quarter, overall production fell 0.8% in the third quarter compared with the second quarter, indicating continued headwinds for the German manufacturing sector. European stock indices declined across the board on Thursday, with the Euro Stoxx 50 down 1.1%. Germany’s DAX dropped 1.3%, France’s CAC 40 fell 1.4%, and the Swiss Market Index was off by 0.6%.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: German trade balance (08:00), SECO Swiss consumer sentiment (09:00), Canadian unemployment rate (14:30), University of Michigan Consumer Sentiment Index (16:00).

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