US Tech Stocks Fall as Sentiment Drops Again – Nasdaq down 1.2%
US equity markets delivered a mixed performance overnight, with technology stocks leading declines as investor sentiment shifted back into negative territory. The pullback in technology shares came despite solid quarterly results from Nvidia earlier in the week, suggesting investors adopted a more cautious stance following recent gains. The Nasdaq fell 1.18% to close at 22,878, while the S&P declined 0.54% to 6,908. The Dow was largely unchanged, edging 0.03% higher to finish at 49,499. Treasury yields moved lower as funds rotated into bonds amid the softer risk tone. The US 2-year yield declined 4.3 basis points to 3.428%, while the 10-year yield fell 4.8 basis points to 4.004%. The US dollar strengthened modestly, with the DXY rising 0.18% to 97.81. Commodity markets were comparatively subdued. Brent prices edged 0.08% higher to $70.91 per barrel, while WTI crude rose just 0.03% to $65.45, following a volatile trading session as market participants continued to monitor developments surrounding US–Iran negotiations. Gold prices advanced 0.39% to $5,184.97, benefiting from lower yields and persistent geopolitical risks.
AI Sentiment Continues to Dominate Global Stocks
The tech market took a hit in trading yesterday as, once again, AI-linked companies dominated investor sentiment. Wall Street had experienced a good day on Wednesday ahead of Nvidia’s key earnings update after the bell, and many market participants would have been forgiven for expecting another good showing on Thursday after the tech giant reported higher-than-expected fourth-quarter results. However, it was not to be. Investor fears over AI capex, and whether some firms will be able to live up to their lofty valuations that have plagued the market since the turn of the year, raised their heads again and led to a sharp sell-off. Traders are expecting more volatility in the sector as the year progresses, and if yesterday’s price action is anything to go by, then investors will be looking for much better earnings numbers in the coming months. If they don’t get it, we could see a decent correction in the market.
Another Busy Day to Close out the Trading Week
Looking ahead, markets are preparing for another potentially active trading session. Geopolitical developments remain a key focus, while several significant macroeconomic releases are due. During the Asian session, Tokyo Core CPI (exp. +1.7% y/y) is released early in the piece, which should see some volatility in the yen. The London session will see a strong focus on Germany, with individual states releasing CPI data throughout the day, but once again the North American trading session looks to offer the most potential for big moves. The major focus for the New York session will be the release of the latest US PPI data, with the market expecting a 0.3% increase for both the headline and core month-on-month numbers. However, Canadian markets will also be paying close attention to the GDP data (exp. +0.1% m/m), which is released at the same time.
