Big Tech stocks suffer biggest weekly drop since ‘liberation day’

{"text":[[{"start":8.91,"text":"Big Tech stocks endured their biggest weekly drop since Donald Trump’s “liberation day” tariff announcement while Treasuries enjoyed one of their best weeks of the year, as AI jitters sent investors scrambling for the relative safety of government debt."}],[{"start":23.878,"text":"The Nasdaq 100 index closed the week 5.5 per cent lower, after a further 2.5 per cent drop on Friday. The weekly drop was the tech-heavy gauge’s biggest since the US president announced sweeping tariffs on trading partners in April 2025."}],[{"start":41.28,"text":"Investor concerns about the US AI trade and a softening in interest rate rise expectations over the past five sessions resulted in US Treasuries enjoying one of their strongest weekly rallies of the year."}],[{"start":52.32,"text":"The drop in yields, which move inversely to prices, provided some respite from a months-long global bond rout, but the steady rise in borrowing costs over recent weeks has not been without casualties."}],[{"start":63.859,"text":"Wall Street’s Russell 2000, which tracks small-cap stocks regarded as more sensitive to the health of the US economy, closed the week 3 per cent lower. That was the index’s sixth consecutive weekly drop, its longest losing streak since October 2018."}],[{"start":null,"text":"

"}],[{"start":80.08,"text":"Jim Caron, chief investment officer for portfolio solutions at Morgan Stanley Investment Management, said the equity market was at risk of a tech-led “correction”, typically defined as a drop of 10 per cent from a peak. The Nasdaq 100 is now down 6.9 per cent from its intraday record high earlier this month."}],[{"start":98,"text":"“Whenever you have very strong market performance like you’ve had in many of these AI stocks, you should expect to see sharp corrections. It’s a two-way street,” he said."}],[{"start":107.52,"text":"Chipmakers and so-called neocloud companies again led Friday’s declines on the US stock market. Shares in CoreWeave, whose bonds have sold off and are trading at prices typically considered distressed, shed almost 12 per cent on Friday. Intel fell 5.8 per cent while Sandisk retreated 6.8 per cent."}],[{"start":124.88,"text":"The continued sell-off in US equities, with the S&P 500 index closing the day 1.1 per cent lower, came despite an earlier rally in tech-dominated Asian indices that had gone into reverse earlier in the week."}],[{"start":138.295,"text":"The South Korean Kospi closed 2.1 per cent higher on Friday while Japan’s Topix rallied 1.7 per cent. In Europe the continent-wide Stoxx 600 gained 0.7 per cent."}],[{"start":149.709,"text":"The yield on 10-year US Treasuries, a reference rate for debt markets across the world, was trading at 5.08 per cent late on Friday — down 0.16 percentage points over the past five sessions in its biggest weekly drop since February."}],[{"start":166.88,"text":"The move in recent sessions marked a swift reversal to a sell-off sparked by the Iran war, and fuelled by a resilient US economy, that had taken US borrowing costs above 5.3 per cent last week to their highest since 2002 from below 4 per cent in late February."}],[{"start":183.335,"text":"Investors said the market had snapped back from the recent bond sell-off in a traditional “risk-off” rally, forcing some investors to unwind their bets against government bonds. “The move has been driven by investor concerns over the AI cycle and position unwinds,” said Jefferies’ Mohit Kumar."}],[{"start":200.48,"text":"The upswing in borrowing costs this year has put mounting pressure on global borrowers, especially lower-rated companies, and a slide in data centre bonds this week spooked the market over the sustainability of the AI boom. One investor said AI-linked borrowers were facing their “Darwin moment”."}],[{"start":216.32,"text":"Richard Saldanha, head of global equities at Aviva Investors, said the upswing in tech stocks “did defy gravity for a period of time” but ultimately the pressure from higher borrowing costs was beginning to tell."}],[{"start":228.393,"text":"The reversal has also brought some relief to European economies, where long-term borrowing costs touched the highest levels in decades in recent weeks."}],[{"start":null,"text":""}],[{"start":236.32,"text":"The high yields on Treasuries have attracted a wave of buyers in recent months, with strong inflows and the biggest bond investors such as asset management giant Pimco saying yields were “much more attractive” against high equity valuations and tight credit spreads."}],[{"start":251.76,"text":"Trevor Greetham, head of multi-asset investing at Royal London Asset Management, said: “Higher yields have attracted government bond buyers, along with a risk-off tone in tech stocks and a sense that the Federal Reserve may hold rates in October.”"}],[{"start":265.6,"text":"Even figures on Wednesday showing US inflation jumped to 3.7 per cent in September were not enough to undermine investor demand for Treasuries this week. Typically, hotter-than-expected data would trigger a Treasury sell-off as traders bet on further rate rises from the Fed to tame price increases."}],[{"start":283.44,"text":"Data visualisation by Ray Douglas"}],[{"start":291.45,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792218278_4233.mp3"}