Introduction: Market selloff continues
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Global markets are racking up their fourth day of losses in a row, as concerns over technology valuations are worrying investors.
Asia-Pacific stocks have dipped to a one-month low today, amid signs that the enthusiasm that has driven stocks higher in recent months is fading, with shares, risky currencies and crypto assets all sliding
MSCI’s broadest index of Asia-Pacific shares outside Japan has lost 1.8%, slipping to its lowest level since mid-October. South Korea’s KOSPI has lost 3.5%, and Hong Kong’s Hang Seng is down 1.9%.
Japan’s Nikkei 225 is also having a very rough day, down over 3%, on concerns over an escalating dispute with China over Taiwan
Last night, the US stock market fell, with the S&P 500 share index closing at its lowest level in a month.
European stock markets are heading for losses when trading begins at 8am GMT too.
Various reasons are being cited for the mood change. Investors are fretting that US interest rates may not be cut as quickly as hoped, following hawkish commentary from some policymakers.
Jitters are building ahead of AI behemoth Nvidia’s results on Wednesday night.
The huge sums of money being committed by AI companies to fund their infrastructure is also raising eyebrows, especially as it is being increasingly funded by debt.
Last night, Amazon raised $15bn in its first US dollar bond offering in three years, adding to a spree of jumbo debt sales by technology firms as they race to fund artificial-intelligence infrastructure.
Michael Brown, senior research strategist at brokerage Pepperstone, explains:
Those Nvidia earnings, incidentally, once again stand as a major macro risk, as enthusiasm around the whole AI frenzy seems to ebb, with the market having shifted from an ‘all capex is good capex’ mood, to one where whether firms are actually able to monetise that expenditure has become the million (or more!) dollar question.
On that note, Amazon kicking-off a six-part bond sale didn’t help matters much yesterday, following hot on the heels of similar sales from Meta and Alphabet in recent weeks, and further fuelling concern that AI expansion is now being fuelled by debt, and not by free cash flow, in turn exacerbating jitters over the sustainability of all the spending that we currently see.
The agenda
-
10am GMT: Treasury Committee hearing on risks and rewards of embracing crypto
-
1pm GMT: Huw Pill, Bank of England’s chief economist, to give speech at Skinners Hall, London
-
3pm GMT: US factory orders and durable goods data for August (delayed by lockdown)
Key events
Bitcoin hits lowest since April
Bitcoin has fallen to its lowest level since April, as the cryptocurrency sector is hit by a sharp selloff.
The world’s largest crypto coin dropped as low as $89,286 this morning, a seven-month low, meaning it has lost all its gains in 2025.
Bitcoin has now fallen by almost a third since hitting a record high at the start of last month.
Such volatility isn’t that unusual, though, as Tony Sycamore, analyst at IG, explains:
Bitcoin, the canary in the risk coalmine, slips below $90k for the first time in seven months as its decline starts to display more impulsive rather than corrective characteristics.
That said, it is notable that its ~29% pullback from the record $126,272 high of early October is now on par with the ~31.5% pullback witnessed at the $74,434 Liberation Day low, coming from the January $109,356 high.
Google boss warns ‘no company is going to be immune’ if AI bubble bursts
The head of Google’s parent company has warned that every company would be affected if the AI boom were to unravel.
Sundar Pichai, the CEO of Alphabet, has told the BBC that the growth of artificial intelligence (AI) investment had been an “extraordinary moment”, but cautioned that there was some “irrationality” in the current AI boom.
Pichai argued that the excitement around AI is very rational, given its potential.
But he also cautioned that there are moments when the tech industry “overshoots”, citing the excess investment we saw in the early days of the web.
Asked whether Google would be immune to the impact of the AI bubble bursting, Pichai said the tech giant could weather that potential storm, but added:
“I think no company is going to be immune, including us.”
Introduction: Market selloff continues
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Global markets are racking up their fourth day of losses in a row, as concerns over technology valuations are worrying investors.
Asia-Pacific stocks have dipped to a one-month low today, amid signs that the enthusiasm that has driven stocks higher in recent months is fading, with shares, risky currencies and crypto assets all sliding
MSCI’s broadest index of Asia-Pacific shares outside Japan has lost 1.8%, slipping to its lowest level since mid-October. South Korea’s KOSPI has lost 3.5%, and Hong Kong’s Hang Seng is down 1.9%.
Japan’s Nikkei 225 is also having a very rough day, down over 3%, on concerns over an escalating dispute with China over Taiwan
Last night, the US stock market fell, with the S&P 500 share index closing at its lowest level in a month.
European stock markets are heading for losses when trading begins at 8am GMT too.
Various reasons are being cited for the mood change. Investors are fretting that US interest rates may not be cut as quickly as hoped, following hawkish commentary from some policymakers.
Jitters are building ahead of AI behemoth Nvidia’s results on Wednesday night.
The huge sums of money being committed by AI companies to fund their infrastructure is also raising eyebrows, especially as it is being increasingly funded by debt.
Last night, Amazon raised $15bn in its first US dollar bond offering in three years, adding to a spree of jumbo debt sales by technology firms as they race to fund artificial-intelligence infrastructure.
Michael Brown, senior research strategist at brokerage Pepperstone, explains:
Those Nvidia earnings, incidentally, once again stand as a major macro risk, as enthusiasm around the whole AI frenzy seems to ebb, with the market having shifted from an ‘all capex is good capex’ mood, to one where whether firms are actually able to monetise that expenditure has become the million (or more!) dollar question.
On that note, Amazon kicking-off a six-part bond sale didn’t help matters much yesterday, following hot on the heels of similar sales from Meta and Alphabet in recent weeks, and further fuelling concern that AI expansion is now being fuelled by debt, and not by free cash flow, in turn exacerbating jitters over the sustainability of all the spending that we currently see.
The agenda
-
10am GMT: Treasury Committee hearing on risks and rewards of embracing crypto
-
1pm GMT: Huw Pill, Bank of England’s chief economist, to give speech at Skinners Hall, London
-
3pm GMT: US factory orders and durable goods data for August (delayed by lockdown)
