Global equities weakened as US markets fell ahead of key inflation data, with technology stocks extending losses and investors reassessing rate cut expectations. European shares were mixed amid earnings and deal activity, while Asia-Pacific markets diverged, with South Korea hitting a record high even as China and Japan traded flat.
Wall Street slides as tech rotation deepens ahead of inflation data
US stocks fell on Thursday as investors continued rotating out of technology stocks ahead of Friday’s CPI report, which is expected to shape rate cut expectations. The DOW and the S&P 500 fell -1.1% while the NASDAQ declined -1.5%, weighed down by renewed weakness in mega-cap tech stocks, including Apple down -4.1%. Software stocks continued to extend recent losses amid concerns over AI-driven disruption, with Cisco sinking -12.0% after issuing a cautious profit outlook despite stronger AI-related sales. Healthcare company Baxter fell -14.5% after forecasting annual profit below expectations due to manufacturing disruptions. Treasury yields moved lower, with the US two-year yield down -5bp to 3.462% and the 10-year yield falling -7bp to 4.115% as investors positioned ahead of the inflation release on Friday.
European equities mixed as deal activity offsets earnings weakness
European stocks closed mixed on Thursday as investors digested a heavy slate of earnings and significant deal activity. The STOXX 600 fell -0.5%, with the FTSE 100 falling -0.7%, Germany’s DAX ending flat, and France’s CAC 40 rising +0.3%. In deal news, Schroders surged +28.5% after Nuveen agreed to acquire the UK asset manager for US$13.5bn, creating a global fund management group with roughly US$2.5tn in assets. EssilorLuxottica rose +4.1% on strong fourth-quarter sales driven by demand for AI-powered glasses, while Siemens rose +0.3% after lifting its fiscal 2026 earnings guidance. Sanofi dropped -4.2% following the abrupt replacement of its CEO, and the Amsterdam-listed Magnum Ice Cream Company fell -16.0% after reporting a sharp decline in full-year profits. UK GDP data showing softer-than-expected growth had limited market impact.
Asia-Pacific mixed as strong US jobs temper rate-cut hopes
Asia-Pacific equities ended mixed on Thursday after a stronger-than-expected US jobs report boosted confidence in growth but reduced expectations of near-term Federal Reserve rate cuts. China’s Shanghai Composite remained flat amid reports Washington and Beijing may extend their trade truce, while Hong Kong’s Hang Seng fell -0.9%, weighed down by technology stocks. Japan’s Nikkei 225 finished flat, with the yen easing and government bonds rallying following Prime Minister Sanae Takaichi’s pledge of ‘responsible’ stimulus. South Korea’s KOSPI jumped +3.1% to a record high, led by Samsung Electronics (+6.4%). Australia’s ASX 200 rose +0.3%, supported by ANZ (+8.5%) after strong earnings, while medical imaging software group Pro Medicus tumbled -23.9% after first-half revenue missed expectations and operating costs rose. New Zealand’s NZX 50 added +0.2%.
Commodities retreat
WTI Crude fell -2.9% to US$62.75/bbl, Gold lost -2.4% to US$4,954.59/oz, while Silver dropped -8.8% US$76.63/oz.
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