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AI concerns weigh on stocks, precious metals slip

Renewed worries about whether heavy spending on artificial intelligence will ultimately pay off for major tech companies dragged US equity indices lower on Thursday and spilled over into Asian markets at the end of the week. The pressure on AI-linked names was underscored by double‑digit losses in Cisco, while logistics stocks also came under scrutiny, and investors trimmed positions in gold and other commodities to cover equity losses before precious metals stabilised on Friday. European equities held up somewhat better than Wall Street but still reflected a cautious tone, and Asian benchmarks were weaker on Friday despite strong weekly gains in Korea and Japan. Market participants now turn their attention to US consumer price data due this afternoon.

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

Falling market
© Shutterstock

US equity indices closed lower on Thursday as renewed concerns about the profitability of heavy investments in AI weighed on technology shares and increasingly on other sectors. The tech-heavy Nasdaq 100 fell 2% to 24,687.61 points, the broad S&P 500 dropped 1.6% to 6832.76 points and the Dow Jones Industrial Average declined 1.3% to 49,451.98 points, while investors also scaled back positions in gold, silver, oil and Bitcoin to offset equity losses. Shares in network equipment maker Cisco, seen as a beneficiary of AI-related spending, slumped more than 12% despite better-than-expected quarterly results, after its margin outlook disappointed and raised concerns over rising memory chip costs. Gold prices recovered part of their losses on Friday, with bullion rising 0.7% after a 3.2% fall in the previous session that marked the sharpest daily decline in a week. Similarly, silver gained about 2% on Friday after dropping more than 10% on Thursday.

Asia stocks ease after US tech slide

Asian equity markets traded lower on Friday following the selloff in major US technology names, although most regional benchmarks remained on track for strong weekly gains. Korea’s Kospi was 0.3% lower and was set for a roughly 8% weekly rise, driven by heavyweight chipmakers such as Samsung Electronics, whose shares have gained nearly 15% this week on optimism over next-generation HBM4 memory and edge AI, and SK Hynix, which was heading for a roughly 6% weekly advance. Japan’s Nikkei 225 was trading 1.2% down after touching record highs above 58,000 points in the previous session but was still on course for a nearly 5% weekly increase, supported by expectations of policy continuity and a pro-growth stance following Sanae Takaichi’s election victory. Australia’s S&P/ASX 200 was down 1.4%. Hong Kong’s Hang Seng Index was trading 1.9% weaker, while mainland China’s CSI 300 was down 1.2% and India’s Nifty 50 was also under pressure, trading 0.9% lower.

European equities soften modestly

European stock indices closed mixed on Thursday, holding up somewhat better than Wall Street but still showing signs of caution. The Euro Stoxx 50 slipped 0.3%, while Germany’s DAX was essentially unchanged and France’s CAC 40 gained 0.3%; the Swiss Market Index ended virtually flat. Moves were generally contained as investors weighed US-led tech weakness against resilient earnings in parts of the European market.

UK GDP growth slows in December

UK gross domestic product increased by 0.1% in December, according to data released on Thursday by the Office for National Statistics, easing from the revised 0.2% expansion in November that had been supported by carmaker Jaguar Land Rover’s recovery from a cyber attack. Output also rose by 0.1% over the final quarter of 2025, matching growth in the previous three months and leaving full-year GDP up 1%, slightly below the 1.1% recorded in 2024 and still weak by historical standards. The market expects UK growth to moderate through 2026 as the Bank of England’s still restrictive policy stance and a softening labour market act as headwinds, even though the Autumn budget tax increases were smaller than initially feared and the central bank has already cut rates six times since August 2024.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Safran.

Economic data in focus: Swiss Consumer Price Index (08:30), euro-area gross domestic product (11:00), euro-area trade balance (11:00), central bank interest rate decision by the Bank of Russia (11:30), US Consumer Price Index (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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