(Feb 6): Global stocks extended their tumble into Asian trading on Friday after heavy losses in US tech stocks and cryptocurrencies sapped risk appetite. Silver slid again, while Treasuries stabilised.
Asian shares fell as much as 1.1% after Wall Street gauges declined, with the Nasdaq 100 suffering its worst three-day rout since April’s meltdown. Bitcoin traded around US$63,000 ($80,272.71) following an earlier plunge. Silver fell as much as 10% on Friday after plummeting 20% in the prior session, while gold also fell.
Further denting sentiment, Amazon.com Inc shares tumbled 10% in after-hours trading after the company said it plans to spend US$200 billion on AI this year. The tech sector seems set for more losses with futures contracts for the Nasdaq 100 sliding 1%.
“It’s been a tough week for investors who were heavily exposed to the parts of the market that led the upside,” said Mona Mahajan at Edward Jones. “Technology and artificial intelligence (AI) come to mind, but more recently we have also seen gold and precious metals sell off, as well as bitcoin and the broader crypto space.”
There’s been no single cause like there was last April when US President Donald Trump’s trade war sent markets into a fearful tailspin. Instead, it’s been a slow drumbeat of news that is sowing anxiety about valuations that many suspected had already run up too far — and causing investors to pull back all at once.
See also: Stocks roar back as Dow Average hits 50,000 mark
That was clear again on Thursday, when the S&P 500 slid 1.2%, its third straight daily decline, and the Nasdaq 100 extended its deepest slide since April. Software stocks extended their tumble after Anthropic, an AI company, rolled out a new model that’s designed to carry out financial research, underscoring the competitive threat from the new technology.
The tech-heavy Nasdaq has seen more than US$1 trillion wiped out since Federal Reserve (Fed) policymakers signalled last week reluctance to lower rates again anytime soon.
Shares in South Korea, a bellwether of AI investments, dropped as much as 5.1% on Friday, before paring some of the losses.
See also: How China uses a ‘national team’ to influence trading
“Investors are questioning their commitment to the pillars that have underpinned markets over the past six months: AI, crypto, and precious metals,” Tony Sycamore, a market analyst at IG Australia, wrote in a note. “This raises the odds of a deeper unwind.”
The weak sentiment pushed investors towards Treasuries, sending two-year yields to the lowest in almost a month during New York trading. Treasuries stabilised during Asian hours with the yield on the benchmark 10-year trading at around 4.18% on Friday.
The downbeat mood was exacerbated by the lowest monthly US job openings since 2020, alongside a rise in jobless claims as companies announced the largest number of job cuts for any January since 2009.
“The latest labour figures reiterate that the US jobs market is not firing on all cylinders, a risk the Fed and investors will have to take seriously should further deterioration occur,” said Bret Kenwell at eToro. “Volatility could persist, particularly if near-term uncertainty increases.”
Corporate highlights:
- Rio Tinto Group is walking away from talks to acquire Glencore plc after the two sides failed to agree on valuation, scuttling a potential mega merger that would have created the world’s largest mining company.
- Blackstone Inc-backed Liftoff Mobile Inc postponed its initial public offering, according to people familiar with the matter, after tech stocks spiraled on concerns over the impact of AI on operating companies.
- Roblox Corp reported fourth-quarter users and bookings that beat analysts’ expectations thanks to a slate of hit games.
Some of the main moves in markets:
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Stocks
- S&P 500 futures had fallen 0.5% as of 10.02am Tokyo time on Friday
- Hang Seng futures fell 1.4%
- Nikkei 225 futures (OSE) fell 0.7%
- Japan’s Topix was little changed
- Australia’s S&P/ASX 200 fell 1.7%
- Euro Stoxx 50 futures fell 0.4%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1782
- The Japanese yen rose 0.2% to 156.74 per dollar
- The offshore yuan was little changed at 6.9367 per dollar
- The Australian dollar fell 0.1% to US$0.6919
Cryptocurrencies
- Bitcoin rose 1.1% to US$63,790.32
- Ether rose 1.7% to US$1,878.58
Bonds
- The yield on 10-year Treasuries was little changed at 4.18%
- Japan’s 10-year yield declined three basis points to 2.195%
- Australia’s 10-year yield declined five basis points to 4.81%
Commodities
- West Texas Intermediate crude fell 0.8% to US$62.78 a barrel
- Spot gold fell 1.8% to US$4,694.75 an ounce
Uploaded by Tham Yek Lee
