Global Markets Fall as Tech Bubble Jitters Resurface
By Dow Jones Newswires StaffStock markets in Asia and Europe followed Wall Street lower after Thursday's rally evaporated. AI-chip maker Nvidia gave up early gains to close sharply lower in the prior session, dragging down the main indexes as fears of an artificial-intelligence bubble resurfaced. Asian and European semiconductor stocks tumbled Friday. Still, U.S. stock futures pointed to a slightly higher open.Meanwhile, the U.S. dollar fell in the wake of the delayed September nonfarm payrolls report Thursday and bitcoin continued its slump.U.S. futures for the S&P 500 were up 0.2%, futures for the Dow Jones Industrial Average climbed 0.3%, while futures tied to the Nasdaq edged up around 0.1%. Changes in futures do not necessarily predict movements after the opening bell.South Korea's Kospi Composite ended down 3.8% as shares in Samsung Electronics and SK Hynix--the world's two largest memory-chip makers--slumped. Shares in SK Hynix tumbled 8.8% by the close. Taiwan's TAIEX fell 3.6%. "The reversal in Nvidia and the broader U.S. tech space has forced investors to reassess whether AI spending can deliver near-term earnings, which directly hit markets like Korea and Taiwan where semiconductors dominate benchmark weights," Tareck Horchani, head of prime brokerage dealing at Maybank Securities, said.Hong Kong's Hang Seng declined 2.4%, while Japan's Nikkei 225 index fell 2.4%. Japan's cabinet under new Prime Minister Sanae Takaichi on Friday approved $135 billion of stimulus, expectations for which have seen Japanese government bond yields rise on concerns over the country's fiscal position. Meanwhile, Japanese Finance Minister Satsuki Katayama expressed concern about the rapidly weakening yen.Shares in European semiconductor companies also fell. Among national indexes, Amsterdam's tech heavy AEX was the biggest decliner--down 1.2%--lead by ASML, ASM and BE Semiconductor, which were all down over 4% in early trade. German chip maker Infineon Technologies fell 3.8% and STMicroelectronics, which supplies Apple and Tesla, was down 2%. The pan-European Stoxx Europe 600 was recently down 1%.Bitcoin fell to a seven-month low after the declines in U.S. stocks overnight. "Adding to the negative backdrop for crypto were lingering questions over the crypto market structure bill that's being worked on in Congress," Deutsche Bank analysts said in a note. With bitcoin now more than 30% below its peak, there are worries about further forced selling as retail investors might need to liquidate other assets to meet margin calls, they said. Bitcoin was recently down 2.5% to a low of $82,032, according to LSEG data.The U.S. dollar eased with market-watchers uncertain about the Federal Reserve's rate path. "We still expect the Fed to stay on hold in December, with markets currently pricing around 32% probability of a cut," Danske Bank analysts said in a note. The DXY dollar index against a basket of major currencies was down 0.1% to 100.085.U.S. Treasury yields declined, extending Thursday's moves in the wake of mixed signals from the delayed September jobs report. The two- and 10-year Treasury yields were down 1 basis point at 3.546% and 4.093%, respectively, according to Tradeweb.Yields on U.K. government bonds eased after weaker-than-expected U.K. retail sales data for October. The 10-year gilt yield fell 2 basis points to last trade at 4.561%.In commodities, oil prices extended their losses after Ukrainian President Volodymyr Zelensky agreed to work on a U.S.-drafted peace plan, easing geopolitical concerns. Brent crude fell 1.9% to 57.89 a barrel, while WTI was down 1.6% to $62.36 a barrel.Write to Barcelona editors at [email protected]