US tech stocks open higher after Thursday's rout
Ding ding goes the Wall Street opening bell, and trading is underway after the US stock market’s most bruising day in 19 months yesterday.
And it’s a mixed picture!
Tech stocks are rising, lifting the Nasdaq up by 1.2% in early trading. AI-linked stocks such as AMD (+8.1%), SanDisk (+8.3%) and Nvidia (+6.5%) are among the top risers.
But the much-storied Dow Jones Industrial Average (DJIA) is moving the other way, down 1% at the open. It’s being dragged down by old-economy stocks such as Nike (-3.5%), Walmart (-3.2%) and McDonalds (-3.1%).
Reminder: Yesterday the Nasdaq index slumped by 5.5%, while the DJIA dropped by 3.44%. So this is only a small recovery for the Nasdaq, and further pain for the Dow.
Tech stocks still higher in afternoon trading
A late update: With two hours to go before Wall Street closes, the tech rebound continues.
The Nasdaq Composite index, which sank into ‘correction territory’ yesterday, is up 1.3% now.
Aerospace manufacturer and launch service provider Rocket Lab are the top riser, up 12.5%, followed by Airbnb (+11.7%), AppLovin (+10%), Advanced Micro Devices (+9.3%) and Intel (+8.9%).
But….Fawad Razaqzada, market analyst at Stonex Trading and FOREX.com, says AI concerns linger, explaining:
Here’s a late take on this week’s sell-off, from Lee Robinson, CIO of Altana Downside Protector Fund and founder of Altana Wealth:
[Credit default swaps are an insurance contract that pays out if a company defaults on its debt, as covered in The Big Short].
Closing post
With European stock markets closed after a nervy day, and Wall Street calmer than yesterday, it’s time to wrap up…
European stock markets fell sharply today as a rout in US tech stocks spread across the Atlantic, after the Democrats’ midterms victory sparked fears of a slowdown in the AI industry.
A sell-off on Wall Street on Thursday was followed by sharp falls in Asian stocks markets overnight. The investor sentiment then reached London, where the market was, at one stage, poised for its worst day since March.
The FTSE 100 index, which tracks blue-chip shares listed in London, was down as much as 254 points, or 2.35%, at 10,528 points during a wave of selling in morning trading. But by the close of the day it had recovered to a 1% fall, helped by a bounce in US stocks when Wall Street reopened.
Across Europe, there were similar losses: Germany’s Dax index has fallen by 2%, France’s Cac 40 has lost 0.8%, and Spain’s Ibex ended the day down 0.6%. Italy’s FTSE Mib fell 0.9%.
In Asia-Pacific markets, Japan’s Nikkei 225 index sunk 6% and South Korea’s Kospi index tumbled more than 6.5%.
“It’s actually a bit of a disaster,” said Christopher Forbes, the head of Asia and Middle East at CMC Markets.
Over in New York right now, the Nasdaq is up 1.5% (having fallen by 5.5% yesterday), and the S&P 500 is up 0.7%.
Here’s the full story:
Here’s the rest of today’s top business news:
Explainer: US tech stock rout: is the AI bubble bursting?
Global financial markets have been thrown into a tailspin as investors bet on an AI slowdown after the US midterm elections.
This is not the first time stock markets have wobbled in recent months due to concerns over a tech bubble. But could this volatility be the start of a huge market meltdown?
Read more here:
Europe’s other major stock markets also recovered some, but not all, of their earlier losses.
Germany’s Dax index has fallen by 2%, France’s Cac 40 has lost 0.8%, and Spain’s Ibex ended the day down 0.6%. Italy’s FTSE Mib fell 0.9%.
FTSE 100 closes down 1%
Phew! After a volatile day’s trading, the London stock market is closed.
And after an early slump, triggered by Thursday’s Wall Street rout, UK stocks have recovered some of their losses.
The FTSE 100 share index has closed for the night down 108.7 points, or 1%, at 10,673 points.
That will make a dent in millions of ISAs and pensions, but it’s not as bad as this morning’s worst point when the Footsie was down 2.35% and heading for its worst day since March.
The US dollar has strengthened further today, and is now up 0.65% against a basket of other currencies.
The London stock market has recovered some, but by not means all, of its earlier losses.
The FTSE 100 index is now down 145 points, or 1.35%, at 10,637 – having earlier been down as much as 2.35%.
Today’s better-than-expected US jobs report may be helping Wall Street to recover.
“This was a relatively strong jobs report across the board,” said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research.
Elon Musk is clawing back some of the $113bn he’s lost in the previous two days (see earlier post).
Tesla’s shares are up 4.9%, while SpaceX have gained 6%, after both stocks fell by over 10% over Wednesday and Thursday.
Hargreaves Lansdown: our clients are buying the dip
Trading platform Hargreaves Lansdown reports that its clients have been “buying the dip” – the practice where investors pile in when a stock falls to tempting levels.
Anna Macdonald, investment strategy director at Hargreaves Lansdown, suggests this week’s tech selloff (which is already unwinding) is a buying opportunity:
Macdonald says:
[We don’t do investment advice here at the Guardian, beyond Caveat emptor, dear readers.]
After a slow start, the S&P 500 index of US stocks is rising, up 1% today.
