Futures contracts for US benchmarks also retreated in early Asian trading after the S&P 500 Index dropped 0.5% and the Nasdaq 100 fell 1.2% on Wednesday. Nvidia slumped 5.5%, its worst day since April last year, weighing on the Magnificent Seven group of mega-caps.
The moves were a further sign of the market’s vulnerability to AI headlines, as investors, businesses, governments and central banks all attempt to understand the long-term impacts of the quickly advancing technology. By contrast, Asian equities have outperformed as investors pile into companies supplying the AI build-out, viewing the region’s firms as the “picks and shovels” of the AI supply chain.The sober response to Nvidia’s results, which included beats on revenue, net income and guidance, was partly because investors now expect such outperformance, according to Hardika Singh at Fundstrat Global Advisors.
Elsewhere, Treasuries held their gains with the yield on the 10-year hovering around 4%. At one point during the US session, it touched its lowest this year. Australia’s 10-year yield declined five basis points to 4.65% early Friday. The dollar wavered.
West Texas Intermediate crude largely held its losses to trade around $65.25 a barrel. The US and Iran will continue nuclear talks next week after making “significant progress” in Switzerland, mediator Oman said.Meanwhile, AI headlines continued to hit the market even after the closing bell in New York.
Shares in Jack Dorsey’s payments giant Block Inc. surged more than 20% in after-market trading following news the company would cut nearly half its workforce — some 4,000 roles — in a pivot to AI. Dell Technologies Inc. shares also jumped in extended trading after a better-than-expected outlook for sales of artificial intelligence servers.
Amid the turmoil, Asian and other emerging markets have been a bright spot for traders. Asian stocks have made their beset start versus the US this century.
The MSCI Asia Pacific Index has advanced in February, taking the year-to-date gains to 15%. In comparison, the S&P 500 has gained 0.9% this year, while the Nasdaq 100 Index has fallen by the same amount.
In Japan, Tokyo’s core inflation gauge eased to the slowest pace in more than a year as Prime Minister Sanae Takaichi’s utility subsidies curbed household energy costs. The yen was a touch stronger Friday.
With inputs from Bloomberg
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