Stocks edge lower as dollar heads for weekly loss
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NEW YORK/PARIS, Oct 16 : Global stocks edged lower on Friday as markets stabilised after a sharp tech-led selloff, while the dollar headed for a weekly loss.
Markets have been rattled this week by concerns over higher interest rates and the debt-fuelled financing behind the AI boom, triggering a selloff in technology and chip stocks.
Traders increased bets on further US rate hikes after stronger-than-expected inflation data on Wednesday, while investors piled into Treasuries and other government bonds.
On Wall Street, the benchmark S&P 500 and the Nasdaq were trading down and were headed for weekly losses. The Dow was flat but set for a weekly gain.
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Technology and communication services were driving losses while top gainers were utilities and consumer staples stocks.
CoreWeave’s shares shed 9 per cent on the day and were on track to lose nearly 23 per cent this week amid increasing investor scrutiny of the financing for the massive AI infrastructure buildout.
The Dow Jones Industrial Average rose 0.01 per cent, the S&P 500 fell 0.61 per cent, and the Nasdaq Composite fell 1.3 per cent.
The MSCI World Equity Index lost 0.10 per cent and was set for a weekly loss. European stock indexes, hit less hard by Thursday’s selloff, were higher, with the STOXX 600 up 0.67 per cent. London’s FTSE 100 rose 0.38 per cent.
“We’re starting to see some cracks in the financing of data centers because you’re not too sure who’s going to be the winners,” Tom Plumb, portfolio manager at Plumb Balanced Fund, said.
“Our view is that there’s going to be some really significant winners. But you have to be careful on the financing capability because companies don’t get into trouble because their assets don’t exceed their liabilities. They get into trouble when they have liquidity issues.”
Asian stocks mostly rose and bond markets steadied on Friday, with investors reversing some of the previous session’s moves.
Indonesian equities suffered their biggest drop since 1998 after index provider MSCI said the country’s market no longer merited emerging-market status and outlined plans to remove it from key indexes tracked by funds.
DOLLAR FALLS, BONDS RECOVER
The dollar index fell 0.23 per cent and was on track for its first weekly decline after four weeks of gains, as lower Treasury yields reduced the currency’s appeal. Further worries about AI would push the dollar down further, analysts said.
The euro rose from its recent 17-month low. It was last up 0.10 per cent at $1.1232.
The Japanese yen strengthened 0.04 per cent against the greenback to 157.92 per dollar.
European government bond yields edged higher, while US bond yields fell. Germany’s 10-year yield rose 0.14 basis point to 3.411 per cent. The yield on benchmark US 10-year notes fell 0.17 basis points to 5.085 per cent.
Even so, yields have eased this week as investors sought the safety of government debt amid concerns about AI-related companies’ finances. G7 government bond markets were on course for their strongest weekly performance since late May.
Brent crude futures rose 0.85 per cent to $106.83 a barrel and were headed for a second straight weekly gain amid concerns over Middle East supplies. Attacks around the Strait of Hormuz have surged in the past 10 days.
Gold gained support from the weaker dollar, rising 0.17 per cent to about $4,177.14 an ounce.
Source: Reuters
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