Tech giants’ spending spooks investors as bonds rally
Shares in Google parent Alphabet plunged 12.6% on Wall Street, wiping out US$500 billion in market value as massive AI spending pushed its cash flow into negative territory.
Tech shares plummeted on Friday, driving US bonds to their biggest monthly gain in nearly three years as investors sought safety amid concerns over the efficacy of massive AI spending. The tech-heavy Nasdaq 100 fell by more than 2%, alongside steep declines in Intel and Amazon, whose results showed cash burn. Alphabet, Google's parent company, saw its stock value wiped out after a 12.6% drop on Wall Street, revealing negative cash flow due to AI investments.
European stocks opened marginally lower due to the limited impact of major tech stocks. In Asia, chipmakers suffered losses earlier in the day. The upcoming Anthropic IPO is seen as a potential indicator of sentiment, with co-chief investment officer Jason Da Silva warning of potential weakness if the listing is poor. Worries were also exacerbated by a significant cryptocurrency hack at Binance, pushing Bitcoin to a six-week low.
Oil prices rose about 2% on Friday, signaling ongoing supply risks from the US-Israeli conflict with Iran. The Bank of Japan decided to keep interest rates static, marking a positive development despite a potential upcoming rate hike. The decision also revealed plans to accelerate ETF sales next year, potentially spooking markets initially.
Bond yields fell as investors became risk-averse, strengthening haven currencies such as the yen and Swiss franc, with the yen nearing a one-month high. The euro, however, faced pressure and was expected to decline further in October.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
