Meanwhile Advanced Micro Devices tumbled after the chipmaker’s revenue forecast disappointed. Alphabet and Amazon were the latest big tech companies to outline vast amounts of capital expenditure, further raising AI unease.
After the sharp losses there was some bounce back in tech stocks on Friday, particularly semiconductors. While the Nasdaq Composite was up 2.2% for the session, for the week overall it declined 1.8%. The S&P 500 fell 0.1%, although industrials, staples and energy sectors saw record closes. Meanwhile the Dow Jones Industrial Average gained 2.5% and crossed the 50,000 milestone for the first time. Treasury yields ended the week slightly lower, with most labour market data surprising to the downside.
European equities saw a positive week despite the pullback seen in tech stocks. On Monday the pan-European STOXX 600 rose to a record, supported by solid gains in banks and healthcare. Gains were more muted the following two sessions, but nevertheless on both occasions fresh record highs were reached. Notable moves included the telecom sub-index climbing to an eight-year high, while tech and media stocks experienced sharp falls and Novo Nordic plunged 17% on Wednesday after a 2026 sales warning. The index pulled back on Thursday with investors weighing up mixed earnings as well as the European Central Bank offering no clues about its next move. The STOXX 600 ultimately ended the week up 1%, despite tech seeing its worst performance in 11 weeks, as well as Stellantis sinking 25% in its worst ever daily drop.
Japanese markets had a positive week ahead of the election on 8 February, which the ruling Liberal Democratic Party had called to secure a majority of seats in the lower house. The Nikkei 225 added 1.8% while the broader Topix jumped 3.7%. The yen was weaker while the yield on the 10-year Japanese government bond was little changed. In contrast Chinese equities saw declines as tech sector losses weighed as well as commodity market fluctuations. The Shanghai Composite dropped 1.3% while Hong Kong’s Hang Seng was down 3.0%. Economic data was also mixed with the official manufacturing purchasing managers’ index slipping into contractionary territory, coming in lower-than-expected, while the S&P Global reading rose for a second month.