Daily Summary: Valuations Under Pressure, Capital Moves Away From Technology

USA

• Thursday’s session is bringing another deterioration in sentiment on Wall Street. Nasdaq 100 futures are down about 2%, US500 is down 1%. US30 and US2000 are holding up better, trimming losses to around 0.5%.
• At the same time, the yield on 10-year US Treasuries fell by more than 10 basis points, dropping back below 5%. This suggests the issue goes beyond the discount rate alone and also concerns confidence in future cash flows.
• The market remains focused on whether technology companies can finance investment in artificial intelligence. Results from Meta, IBM, and Tesla were not enough, while Lam Research disappointed investors.
• Another headwind is rising oil prices. Yesterday, drones attacked the Shaybah oil field in Saudi Arabia. Production was not halted, but investors fear further strikes. Markets and regional states are preparing for the possibility of another escalation wave between the US and Iran. Saudi Aramco instructed employees to leave its headquarters in Dhahran, and the US is reducing its diplomatic presence in Persian Gulf countries. Oil is up more than 2%, pushing Brent back above $108 per barrel.
• An even stronger move is seen in natural gas futures. European contracts are up more than 4% amid fears of further supply disruptions. US gas prices are also rising despite forecasts for warmer weather, additionally supported by contract roll effects.
• The market is awaiting Anthropic’s S-1 prospectus filing (IPO), expected as soon as Friday (tomorrow).

Company news, USA

• Meta Platforms (META.US): Shares fell about 7%. Revenue beat expectations, but reported profit disappointed. The announcement of a new share class to raise capital further drew attention to the cost of AI investment.
• Tesla (TSLA.US): The stock was down around 2% after earlier swings. Earnings beat expectations, while revenue came in below forecasts.
• Nvidia (NVDA.US): Shares dropped more than 4% amid further deterioration in sentiment toward technology.
• CoreWeave (CRWV.US): Declines reached about 10%. Leverage and the cost of financing infrastructure remain a major investor concern.
• Lam Research (LRCX.US): Shares fell about 10% despite strong quarterly results. The move fits the broader sell-off in semiconductors.
• IBM (IBM.US): Revenue rose 4.7% to $17.1bn, and adjusted EPS was $2.95 versus $2.85 expected. The improvement did not shield the stock from weak tech sentiment.
• Lockheed Martin (LHM.US): The defense company posted results well above consensus. Higher sales in missiles and aeronautics, plus guidance raised above consensus, pushed the shares up more than 4%.
• Spotify (SPOT.US): Shares gained about 6.0%. Investors welcomed strong subscriber growth and updated guidance pointing to continued, durable operating margin expansion.

Macro data, USA

• Jobless data showed a stable US labor market. Initial jobless claims came in at 194k versus 200k expected.
• The EIA reported an increase in natural gas inventories of 77 bcf, close to expectations of 78 bcf.

Europe

• European equities are also under pressure, particularly due to natural gas prices, which are an important part of Europe’s energy mix. The STOXX 600 was down about 1%, giving back gains from the previous session.
• The euro area bond market looks especially concerning. While US bonds are rallying, French bonds continue to be sold. The yield on French 10-year bonds briefly exceeded 5.14% and then stood around 5.06%. It surpassed the yield on comparable US debt for the first time since 2013.

Company news, Europe

• Hermès: Shares fell about 7.3% after disappointing results, especially on revenue, pointing to a persistent and structural slowdown in apparel and luxury.
• Nestlé: The stock gained about 1% after results showed sales growth above expectations.
• UCB: Shares rose about 12% after the company raised its 2026 outlook, supported by demand for key drugs.
• ASML, Infineon, and STMicroelectronics: Shares fell about 3%, participating in the global tech sell-off.

Macro data, Europe

• European consumer sentiment came in slightly worse than expected at -17.9.

Forex

• Among major currencies, the US dollar and the yen stand out. USDJPY fell about 0.7%.
• The euro, pound, and US dollar are clearly gaining against emerging market currencies, signaling a classic risk-off move. Declines in that segment are around 0.7% to 1%.

Commodities

• Oil is rising again. Brent briefly exceeded $112 per barrel, the highest level since May. Attacks on targets in Saudi Arabia and incidents in the Persian Gulf region increased fears of further supply disruptions.
• Gold is not benefiting from the weaker sentiment. Spot fell about 2.1% to $4,056 per ounce. Pressure came from concerns that higher energy prices will prolong elevated inflation and high interest rates. Silver fell about 4.6%.

Crypto

• Cryptocurrencies are tracking weakening tech equities.
  • Bitcoin gave back Wednesday’s rebound, falling below $82,000. 
  • Ethereum fell nearly 4%, below $2,400.