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Tech sell-off hits global stock markets

Global equities came under pressure as a sell-off in technology and artificial intelligence-linked shares weighed on sentiment. US stocks ended mixed on Wednesday, with the Dow Jones Industrial Average hovering near a record high but the Nasdaq retreating sharply as investors rotated out of chipmakers. Asian markets were trading mostly lower on Thursday, led by steep losses in South Korea, as concern grew that spending on AI infrastructure may become more restrained. Softer US economic data released on Wednesday did little to alter interest-rate expectations, with investors now awaiting Thursday’s US labour market report. Gold was trading around USD 4060 per ounce on Thursday, recovering from a fall below USD 4000, while concerns about higher rates kept a lid on gains. Bitcoin also broke back above USD 60,000.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Negative market data
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Asian equities weakened on Thursday, led by South Korea, where the KOSPI slumped 4.9% after falling as much as 7% in its steepest drop in months, while Samsung Electronics and SK Hynix lost more than 7% each. Japan’s Nikkei 225 fell 1.3%, after a renewed sell-off in global artificial intelligence-linked shares hit semiconductor and electronics suppliers across the region. Sentiment deteriorated after reports that Facebook parent company Meta Platforms is considering selling AI computing capacity and that Apple is assessing memory chips from Chinese suppliers, adding to concerns that AI infrastructure spending may become more restrained. Hong Kong’s Hang Seng Index was trading 0.7% higher on Thursday, but mainland China’s CSI 300 was down 2.2%. Australia’s S&P/ASX 200 was little changed.

US stocks mixed as Dow records high

US equities ended mixed on Wednesday, with the Dow Jones Industrial Average little changed at 52,305.24 points after touching a record high, while the Nasdaq 100 fell 1.5% to 29,809.13 and the S&P 500 slipped 0.2% to 7483.23. The pullback in technology shares followed a strong 4% rebound in the Nasdaq 100 over Monday and Tuesday, as investors rotated out of chipmakers and into software stocks. Facebook parent company Meta Platforms jumped 9% after Bloomberg reported it may build an AI cloud infrastructure business.

Mixed US macroeconomic data

Softer-than-expected ADP employment and ISM manufacturing survey data did little to weaken expectations for higher US interest rates, with investors turning their attention to the June labour market report due today. US manufacturing activity expanded for a sixth straight month in June, with the ISM Manufacturing Purchasing Managers' Index (PMI) easing to 53.3 from 54.0 in May, data released on Wednesday showed. US private employers added 98,000 jobs in June, down from 122,000 in May and slightly below market expectations, ADP data showed on Wednesday. Separately, Federal Reserve Chair Kevin Warsh said on Wednesday that the US central bank would not tolerate inflation above its 2% target, stressing its commitment to restoring price stability. He said inflation expectations and risks had eased in recent months, but he also reiterated that the Fed would remain independent when setting policy, despite pressure from US President Donald Trump for lower rates. Yields on two-year and 10-year Treasuries rose slightly midweek and were trading around 4.2% and 4.5%, respectively, while the US Dollar Index slipped slightly.

Euro-area inflation slows in June

Eurozone annual inflation slowed to 2.8% in June from 3.2% in May and 2.0% a year earlier, according to Eurostat flash data released on Wednesday. The deceleration was driven by weaker price growth in energy, which eased to 8.7% from 10.8%, while services inflation fell to 3.2% from 3.5% and food, alcohol and tobacco slowed to 1.6% from 1.9%; non-energy industrial goods were unchanged at 0.9%. S&P Global data released separately Wednesday showed euro-area manufacturing PMI slipped to 51.4 in June from 51.6 in May, signalling a fifth consecutive month of expansion. European equities closed mostly lower on Wednesday. The Euro Stoxx 50 fell 0.7%, while Germany’s DAX added 0.2% and France’s CAC 40 lost 0.8%. Switzerland’s Swiss Market Index also declined on Wednesday, slipping 0.6%.

Corporate and economic calendar

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

Economic data in focus: Swiss Consumer Price Index (08:30), Italian unemployment rate (10:00), EU unemployment rate (11:00), US nonfarm payrolls and unemployment rate (14:30), US weekly initial jobless claims (14:30) and Canadian Purchasing Managers’ Index (15:30).

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Editor: Alessandro Fezzi
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