European stock futures fell along with Asian shares on Thursday as investors began to exit the artificial intelligence frenzy that has fueled this year’s bull market. The yen rose for a fourth straight day ahead of a Bank of Japan meeting next week.
Eurozone Stoxx 50 contracts fell 0.6%, mainly due to the biggest drop in the MSCI Asia Pacific Index in more than three months. Japan's Nikkei 225 entered a technical correction, while South Korea's benchmark index fell nearly 2% as chipmaker SK Hynix's shares fell sharply despite beating earnings expectations. U.S. stock index futures rose after the S&P 500 fell 2.3%.
The yen rose 1.1% against the dollar, hitting its highest level since May as traders began to position for a possible rate hike by the Bank of Japan.
The People's Bank of China cut its medium-term lending facility rate to 2.3% from 2.5% on Thursday, following a surprise cut to a key short-term rate to stimulate slowing economic activity. Stocks in Hong Kong and mainland China fell.
In the Philippines, the country's central bank suspended currency trading for a second day due to the typhoon. Taiwan's stock market was also closed due to the typhoon.
The tech-heavy Nasdaq 100 fell 3.7%, dragged down by its largest component. Alphabet Inc.’s spending was higher than analysts expected, sending its shares down 5%, while Tesla Inc.’s delayed Robotaxi launch sent its shares tumbling 12%. U.S. Treasuries rose in Asian trading after the curve steepened in the previous session on bets that the Federal Reserve is about to cut interest rates. Big tech companies drove the stock market’s rally through much of 2024 before stumbling. Traders rotated out of large-cap stocks and into market laggards, driven by Fed rate cut bets and concerns that artificial intelligence still needs to pay off.
Oil prices fell, joining a broader retreat in commodities as a weaker economic outlook in China offset a drop in U.S. inventories.
