Stocks fall, bonds gain as Meta dents tech optimism
FILE PHOTO: A man walks past a stock quotation board showing the Nikkei stock prices outside a brokerage in Tokyo, Japan, June 16, 2026. REUTERS/Manami Yamada/ File Photo
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LONDON, Oct 22 : Global stocks retreated on Thursday, as tech earnings’ optimism provided only fleeting support and was offset by nagging concern over the outlook for AI, while stalemate in the Gulf pushed up oil prices.
MSCI’s All-World index was set for its largest daily fall in two weeks, down 0.4 per cent, as tech shares from Seoul and Tokyo to Amsterdam and Paris tumbled.
Meta, the first of the so-called AI hyperscalers to publish quarterly results, reported third-quarter revenue late on Wednesday that beat expectations. But any optimism was short-lived, after the company unveiled a plan to issue non-voting stock that revived concern over its mounting capital commitments.
“There are lots of cross currents in markets at the moment, which are grappling for a narrative right now,” Ben Laidler, head of macro and equity strategy at Bradesco BBI, said.
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“The big concern is that AI-driven earnings narrative, which has supported US earnings and spread to global equities, may be challenged here.”
Meta also suffered a legal blow overnight, after a judge in New Mexico ordered the company to pay a $25 billion penalty to the state in a data privacy case.
In Europe, the STOXX 600 fell 1 per cent, weighed down by tech-related stocks such as ASML, Schneider Electric and Siemens Energy. US stock futures fell between 1 per cent and 2 per cent, suggesting a drop at the open bell later.
Shares in Meta fell around 0.8 per cent and those in Tesla, which also reported earnings and cut its spending forecast ahead of a possible merger with SpaceX, dropped nearly 5 per cent in the premarket.
Geopolitical concerns played out in oil markets, where Brent crude rose 3 per cent to $112 a barrel, near a five-month high, after more Houthi attacks in Saudi Arabia raised the risk of wider conflict and supply disruptions in the Middle East.
There was enough nervousness about the possible damage to the global economy to offset concern about a sustained pickup in inflation to drive flows into government bonds, which pushed US Treasury yields down by the most in a week. The 10-year note was last 7 basis points lower at 5.075 per cent, trading below that of France for the first time in 13 years.
French government bonds have been battered this month, driving yields above 5 per cent for the first time since 2002, as investors looked for signs the government can contain social unrest and bring spending under control.
The euro, which has been dragged 0.8 per cent lower this month, was steady on Thursday, trading around $1.1241, leaving the dollar index, which tracks the US currency against a basket of six others, down 0.1 per cent.
The yen drew safe-haven demand, leaving the dollar down 0.7 per cent on the day at 157.1, after Deputy Bank of Japan Governor Ryozo Himino signalled his readiness to raise borrowing costs. The Korean won was muted at 1324, after the Bank of Korea left its benchmark interest rate unchanged at 3.00 per cent on Thursday.
Gold missed out on safe-haven flows, dropping 1.2 per cent to $4,090 an ounce, while in cryptocurrencies, bitcoin and ether both lost 3 per cent to trade at $82,000 and $2,412, respectively.
(Additional reporting by Jiaxing Li in Hong Kong; Editing by Kate Mayberry, Shri Navaratnam and Susan Fenton)
Source: Reuters
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