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Tech volatility weighs on stock markets

Global equity markets were cautious on Friday as renewed weakness in the US technology sector, led by a sharp pullback in Nvidia despite strong quarterly results, rippled through trading in Asia and weighed on European sentiment. Most major Asian indices traded softer, with profit-taking hitting AI-linked names in South Korea in particular. On Wall Street, the S&P 500 and Nasdaq 100 retreated on Thursday while the Dow Jones was little changed, as investors questioned how long the current AI cycle can continue at its recent pace despite solid US labour market data. In Europe, the Euro Stoxx 50 slipped from an intraday record. In other markets, slightly lower US Treasury yields, a softer dollar and firm precious metals underlined a modest shift into safe-haven assets.

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

Volatility
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Most Asian equity markets traded lower on Friday after Wall Street’s technology sector weakened, with Nvidia shares dropping a day earlier in New York trading despite robust quarterly earnings, although indices in South Korea and Japan remained on track for strong gains in February. Korea’s Kospi was down 1% at 6244.13 points as investors booked profits after recent record highs, with major chipmakers such as Samsung Electronics and SK Hynix declining. In Japan, the Nikkei 225 was trading 0.4% higher after Tokyo consumer price data showed inflation, including the core measure, easing below the Bank of Japan’s 2% target in February, reinforcing expectations for continued monetary support and additional fiscal stimulus under Prime Minister Sanae Takaichi. Australia’s S&P/ASX 200 was 0.3% higher but heading for a 3.3% monthly rise. Hong Kong’s Hang Seng Index up 1.1%, while mainland China’s CSI 300 was 0.3% lower and India’s Nifty 50 lost 0.9%.

US tech stocks drag on Wall Street

US equities ended mixed on Thursday, with the Dow Jones Industrial Average virtually unchanged while the S&P 500 fell 0.5% and the Nasdaq 100 dropped 1.2%, as sharp losses in technology stocks weighed on sentiment despite solid earnings from artificial intelligence leader Nvidia. Nvidia shares slid 5.5% after the firm once again exceeded profit expectations, with market participants highlighting growing investor concerns that the AI cycle may be peaking and that a faster roll-out of the technology could accelerate business disruption. The sell-off spilled over to other US chipmakers, including Broadcom, Intel, Applied Materials and Lam Research, which recorded declines of between 3% and 4.9%. In macroeconomic data, US initial jobless claims rose slightly to a seasonally adjusted 212,000 in the week ended Thursday, up from 208,000 the previous week, indicating a broadly stable labour market and an unemployment rate that appears steady in February after easing to 4.3% in January from 4.4% in December.

Euro-area stocks edge lower on AI jitters

Key European equity benchmarks posted mostly modest losses on Thursday as sentiment was under pressure due to sharp declines in US technology shares. The euro area’s Euro Stoxx 50 index reversed an intraday record at to close down 0.3%, while Switzerland’s SMI fell 0.5%. Germany’s DAX added 0.5% to 25,289.02 points and France’s CAC 40 advanced 0.7% to 8620.93 points.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from BASF and Swiss Re.

Economic data in focus: French gross domestic product (08:45), French Consumer Price Index (08:45), Swiss gross domestic product (09:00), Swiss KOF Economic Barometer (09:00), German unemployment rate (09:55), German Consumer Price Index (14:00), Canadian gross domestic product (14:30) and US Producer Price Index (14:30).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.