The rout in global tech shares eased yesterday after fears over the vast funding needs of AI hammered Wall Street and triggered the biggest rally in US Treasuries in more than three years.
Asia’s bourses steadied overnight and, though Europe was 0.5 per cent lower ahead of Wall Street’s open, there was some respite from the pressure on French government bonds , where widening spreads had drawn comparisons with the euro zone debt crisis.
Oil, however, showed no signs of easing, with Brent at a new five-month peak of $115 a barrel after Houthi attacks on Saudi Arabia and reports that the US and Israel had drawn up plans for renewed strikes on Iran after the US midterm elections.
European natural gas prices jumped another 4pc too to leave them almost 30pc higher so far this month.
“It’s certainly a nervy market,” said Societe Generale’s Global Head of Currency Strategy, Kit Juckes.
“The oil price is just grinding higher... and we’ve got an inevitable correction in tech after its huge run-up, so it’s actually hard to see why the dollar isn’t higher.”
The US currency was 0.2pc stronger on the day against its main basket of other top currencies, but it remains flat for the week.
The euro meanwhile was headed for a moderate weekly loss, which was not a big move, Soc Gen’s Juckes added, given all the bond market risk. The yen was on track for its biggest weekly rise in over a month after attracting safe-haven demand.
For the jittery Wall Street bulls, Nasdaq futures were off 0.5pc, while S&P 500 futures slipped 0.25pc after the Nasdaq’s 2.6pc tumble on Thursday, its biggest slump since June.
Telecoms stocks were the latest casualties after a report that Elon Musk’s SpaceX was in talks to launch a nationwide cellphone carrier. Thursday’s rout had seen the Philadelphia SE Semiconductor Index, whose firms are at the centre of the AI boom, plunge almost 7pc. The likes of Meta dropped nearly 8pc, whilst CoreWeave’s share price slumped 10pc amid concerns about its debt burden.
Back in the bond markets, US Treasury yields were ticking up again, but were still just about under the key 5pc level after Thursday’s run for safety had fuelled their biggest one-day drop since March 2023.
In Asia, Japan’s Nikkei dipped 0.3pc to end its week down over 4pc, while South Korea’s KOSPI ended its session higher but after shedding as much as 4pc early on.
Mainland China’s blue chips found support after hitting their lowest since July 2025, with the CSI300 closing the day up 1.7pc. Hong Kong’s Hang Seng also rose 0.7pc after dropping 3pc on Thursday.
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