- Investors flee AI names for fixed income as tech rout deepens
- TSMC beats on September-quarter profit; Anthropic revenue hits $16.8B
- Ericsson tops estimates; Pernod Ricard’s sales decline milder than feared
- India trade gap widens to $30.1B; Richemont, Signet in talks for De Beers stake
- Europe and China fall 1%, Japan drops 2.5%; Nasdaq futures off 1.5%
Global equities sold off sharply as investors abandoned the artificial-intelligence trade that has driven this year’s rally, rotating into government bonds in a flight to safety that left technology shares bearing the brunt of the damage.
The retreat followed yesterday’s CPI report, whose yield implications continue to ripple through markets. Rising yields have compressed the valuations of long-duration growth stocks in particular, and the AI complex — the market’s most crowded trade — has been the first casualty. European and Chinese benchmarks each fell 1%, while Japan slid 2.5% and Nasdaq futures pointed to a 1.5% loss at the open.
The corporate news flow offered a stark contrast to the price action. Taiwan Semiconductor Manufacturing Co. reported better-than-expected profit for the September quarter, a result that would ordinarily have been read as confirmation of resilient AI demand. Anthropic PBC, meanwhile, has told prospective investors that third-quarter 2026 revenue reached $16.8 billion — a figure that underlines the sheer scale the leading AI developers are now reaching. Neither disclosure was sufficient to arrest the selloff, a sign that positioning, rather than fundamentals, is driving flows.
In telecom equipment, Ericsson AB beat analyst estimates on solid demand, while Pernod Ricard SA reported a smaller-than-expected decline in sales as strength in India offset weakness in China and the US — a reminder of how uneven the global consumer recovery remains.
Elsewhere, India’s trade gap widened to $30.1 billion in September from $26.0 billion in August, driven by higher oil prices and holiday-period demand. And in a notable consolidation play, luxury group Richemont and US retailer Signet Jewelers are in talks to join a consortium bidding for diamond miner De Beers.
Markets at a Glance
- Equities: Europe and mainland China each lost 1%, Japan dropped 2.5%, and US futures pointed to a 1.5% decline for the Nasdaq as the AI unwind broadened.
- Commodities: Brent crude fell 1.5% to $104.50 a barrel, offering little offset to the risk-off tone.
- Rates: Government bonds rallied as investors sought shelter, with falling yields reflecting demand for duration rather than any improvement in the inflation outlook.
- Earnings: TSMC, Ericsson and Pernod Ricard all delivered results at or above expectations — a contrast with the market’s refusal to reward them.
Leave a Reply