London (AFP) – US and European stocks slid Thursday as yields on government debt spiked higher and as crude prices rose despite a recent improvement to oil supplies. The yield on US 10-year Treasury notes rose to 5.34 percent, hitting the highest level since the dot-com bust in 2002. While they later fell back under 5.3 percent, Wall Street stocks were lower across the board in late morning trading. “It looks like the relentless rout in the bond market is sending investors running for cover,” said Neil Wilson, a market strategist at Saxo UK.
European stocks finished the day lower, with French and UK 10-year yields also striking their highest levels since the 2000s, while 30-year bonds also hit multi-decade peaks on growing inflation fears. Paris stocks dropped 1.5 percent, with sentiment also being hit by the French government indicating it plans to raise taxes and cut spending to bring down its deficit.
In Asia, Tokyo and Seoul stock markets closed with strong gains thanks to a positive announcement from chip maker Micron as well as other AI news. “Asian stocks with links to AI still managed strong gains as they reacted to a blockbuster set of earnings from US memory chip outfit Micron,” said AJ Bell investment director Russ Mould. Record results by chip maker Micron Technology provided a much-needed boost to investors amid lingering worries about the vast sums pumped into the AI sector in recent years, and when companies will see returns.
“Today’s early gains came after Micron Technology released a strong set of quarterly numbers after yesterday’s US close, while it signalled robust demand for AI memory chips,” said Trade Nation analyst David Morrison. “While the response from Micron’s share price was mixed, its results helped to lift other semiconductor stocks, along with those of AI-adjacent companies,” he added. Micron shares were down 1.7 percent in New York trading, after climbing around 12 percent over the past month. Tech stocks were flat overall.
Oil prices rose sharply, adding to the inflation fears as Brent crude once again surpassed $100 a barrel. Trade Nation’s Morrison said the reason behind the rise was unclear, but said Ukraine’s claim to have damaged another Russian oil facility may have played a part. Recent data has pointed to crude oil supplies from the Middle East returning to close to pre-war levels, but supplies of refined products remain lower due to damage to facilities in the region as well as in Russia.
Traders are meanwhile awaiting Friday’s US jobs data for clues on whether the Federal Reserve will follow up last month’s interest rate hike, aimed at combating elevated inflation, with another round of tightening in October. The prospect of back-to-back increases eased Wednesday after the Fed’s preferred inflation gauge came in at 3.4 percent year-on-year in August, unchanged from July.
Key figures at around 1530 GMT –
New York – Dow: DOWN 0.6 percent at 50,612.92 points
New York – S&P 500: DOWN 0.2 percent at 7,632.94
New York – Nasdaq Composite: DOWN 0.2 percent at 26,808.57
London – FTSE 100: DOWN 1.7 percent at 10,428.27 (close)
Paris – CAC 40: DOWN 1.5 percent at 7,847.39 (close)
Frankfurt – DAX: DOWN 1.0 percent at 24,939.35 (close)
Tokyo – Nikkei 225: UP 3.3 percent at 68,956.72 (close)
Hong Kong – Hang Seng Index: Closed for a holiday
Shanghai – Composite: Closed for a holiday
Brent North Sea Crude: UP 3.7 percent at $101.70 per barrel
West Texas Intermediate: UP 2.3 percent at $92.53 per barrel
Euro/dollar: DOWN at $1.1244 from $1.1325 on Wednesday
Pound/dollar: DOWN at $1.3204 from $1.3257
Dollar/yen: UP at 157.52 yen from 157.38 yen
Euro/pound: DOWN at 85.14 pence from 85.41 pence.
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© 2024 AFP
