New York (AFP) – Wall Street’s main stock indices overcame an early bout of tech jitters Friday thanks to buy-the-dip traders, finishing mildly lower. Meanwhile, oil prices fell as shipping traffic resumed through the Strait of Hormuz. Ships continued to leave the Gulf, some of them braving a route not authorized by Tehran, despite an attack on a freighter that forced the suspension of a UN evacuation, tracking platforms showed. The United Nations operation had freed 115 vessels and 2,500 seafarers trapped by the dispute over control of the Strait of Hormuz, before the attack struck a ship in the Gulf of Oman, the UN maritime agency said. International benchmark Brent crude fell 4.3 percent, returning to levels seen before the war on Iran began. Its US equivalent, West Texas Intermediate, dropped 3.7 percent.
Stock markets started the day on the back foot as tech stocks came under renewed pressure after Apple announced price hikes on laptops, tablets, and other products, citing spiraling memory and storage costs sparked by the rise of artificial intelligence. That was followed by Microsoft announcing price hikes for its popular Xbox gaming consoles, also citing an AI-fueled surge in component costs. The tech-heavy Nasdaq took the brunt of US losses, closing down 0.24 percent. Sharp downturns rocked Asian markets, with South Korea’s Kospi closing down almost six percent, a rout that sparked a 20-minute trading halt. Shares in chip giant and market heavyweight SK hynix fell more than eight percent. Tokyo, also heavy with tech firms, fell more than four percent, with tech investment giant SoftBank plunging over 12 percent as The New York Times reported that ChatGPT-maker OpenAI is considering holding off on an initial public share offering.
“News that OpenAI would delay its IPO until next year, over fears it would not attract enough interest to give it a $1 trillion listing, has also weighed on the market mood on Friday,” said Kathleen Brooks, research director at XTB trading group.
The tech sector — in particular, the so-called Magnificent Seven companies that includes AI chip designer NVIDIA, Apple, and Google’s parent company Alphabet — has been the main driver of a surge to record highs across several markets globally amid an eye-watering boom in all things AI. That euphoria may be waning on worries that company valuations look stretched, amid questions about when firms will see a return on the trillions of dollars invested. “The substantial expenses tied to the modern infrastructure has firms scrambling for cash on their balance sheets, via debt sales and equity offerings, and that’s adding risk to the landscape,” said Jose Torres of Interactive Brokers.
Forex.com analyst Fawad Razaqzada said that while some degree of profit-taking was probably inevitable after the tech stock rally, “the latest moves also raise broader questions about whether expectations for the sector have simply run too far ahead of commercial reality.” While US stocks retreated early, they were saved by investors swooping in to “buy the dip.” “Dip buyers have come storming in to steady the ship after the wave of selling of the last 18 hours,” said Chris Beauchamp, chief market analyst at IG.
**Key figures around 2000 GMT:**
– New York – Dow: DOWN 0.1 percent at 51,876.11 points (close)
– New York – S&P 500: DOWN 0.1 percent at 7,354.02 (close)
– New York – Nasdaq Composite: DOWN 0.2 percent at 25,297.62 (close)
– London – FTSE 100: DOWN 0.2 percent at 10,508.02 (close)
– Paris – CAC 40: DOWN 0.6 percent at 8,384.87 (close)
– Frankfurt – DAX: DOWN 1.3 percent at 24,671.22 (close)
– Seoul – Kospi: DOWN 5.8 percent at 8,411.21 (close)
– Tokyo – Nikkei 225: DOWN 4.2 percent at 69,360.88 (close)
– Hong Kong – Hang Seng Index: DOWN 1.8 percent at 22,671.86 (close)
– Shanghai – Composite: DOWN 2.3 percent at 4,027.26 (close)
– Euro/dollar: UP at $1.1388 from $1.1374 on Thursday
– Pound/dollar: UP at $1.3200 from $1.3199
– Dollar/yen: DOWN at 161.75 yen from 161.81 yen
– Euro/pound: UP at 86.28 pence from 86.18 pence
– West Texas Intermediate: DOWN 3.7 percent at $69.23 a barrel
– Brent North Sea Crude: DOWN 4.3 percent at $71.99 a barrel
© 2024 AFP
