A late PS: The Nasdaq has registered its biggest weekly percentage drop since early April as investors worried about the sustainability of a rally in artificial intelligence shares.
Although the tech-focused Nasdaq recovered from its earlier lows, it still posted a fall of around 3% for this week.
Closing post
Time for a recap.
Stock markets are ending the week in the red, as worries about the US economy and high technology valuations hit shares.
On Wall Street, the Nasdaq Composite has shed 2% today, adding to losses earlier this week.
According to the Financial Times, US tech groups closely tied to the artificial intelligence boom have lost more than $1tn in market value since last Friday.
The S&P 500 share index is down over 1%.
As well as fears of an AI bubble, the latest economic data is worrying investors. They learned today that US consumer confidence has dropped (see earlier post), a day after hearing that US job cuts jumped in October.
James Knightley, ING’s chief international economist for the US, explains:
The November reading of the University of Michigan sentiment index has deteriorated further, dropping to 50.3 from 53.6 relative to a consensus prediction of 53.0.
The expectations component dropped 1.3 points to 49, while the current conditions series fell 6.3 points to 52.3 - an all-time low for the monthly series - and this goes back to the 1970s! This is likely due to government shutdown concerns tied to SNAP food payments and ongoing non-payment of wages.
London’s FTSE 100 has ended the day at a two-week low, helping to pull European markets into their worst week since late August.
In other news…
ITV has said it is in preliminary talks to sell its broadcasting arm to the parent company of Sky in a £1.6bn deal, sending shares soaring.
UK house prices rose at their fastest pace since January, a leading property index shows, with demand improving despite market uncertainty over likely tax changes in this month’s budget.
The European Commission is considering plans to delay parts of the EU’s Artificial Intelligence Act, after intense pressure from businesses and Donald Trump’s administration.
The vital flow of chips from China to the car industry in Europe looks poised to resume as part of the deal struck last week between Donald Trump and his Chinese counterpart, Xi Jinping.
