The global sell-off triggered by concerns over AI spending and tech stock valuations deepened on Thursday, with tech stocks continuing to decline from the US market to Asian markets, while commodities like silver also experienced a historic plunge, putting multiple markets under simultaneous pressure.
European stocks opened mixed, with Maersk down 7%. On Thursday, foreign investors net sold a record 4.99 trillion won ($34 billion) worth of Korean Kospi index constituents. Institutional investors also net sold 2.07 trillion won worth of Kospi index constituents. In after-hours US trading, Alphabet, Qualcomm, and Arm Holdings continued to slide due to平淡的earnings reports, further dampening market sentiment. The Nasdaq 100 index recorded its worst two-day decline since last October and fell below the 100-day moving average.
The precious metals market was also hit hard. Silver plunged up to 17% on Thursday, and gold fell up to 3.5%, as both commodities continued to search for a price bottom after last Friday's historic sell-off. Iron ore prices fell towards $100 per ton on Thursday, affected by seasonal slowdowns, softening market supply-demand balance, and a general decline in metals.
This wave of selling swept through the stocks, bonds, and loans of several Silicon Valley companies, wiping out hundreds of billions of dollars in market value in two days. As the US economy performs strongly, investors are turning to other sectors, with concerns over tech stock valuations, soaring capital expenditures, and the potential for AI to erode existing software business models intensifying.
- European stocks opened mixed: Euro Stoxx 50 up 0.05%, Germany's DAX down 0.19%, UK's FTSE 100 down 0.3%, France's CAC 40 up 0.2%. Vodafone fell 4.6% as its earnings showed organic service revenue growth missed expectations; wind power giant Vestas fell 4.9%; BNP Paribas rose 4.7% on profits exceeding expectations and raised targets; Maersk fell 7% as the company expects 2026 profits to decline; Volvo Cars fell 14% on Q4 revenue below expectations.
Japan's Nikkei 225 closed down 0.9% at 53,818.04 points. Japan's Topix index closed down 0.1% at 3,652.41 points. South Korea's Kospi closed down 3.9% at 5,163.57 points.
- The US Dollar Spot Index rose 0.1%.
- The US 10-year Treasury yield fell 1 basis point to 4.26%.
- Japan's 10-year government bond yield fell 1.5 basis points to 2.235%.
- Spot gold returned above $4880/oz, narrowing its intraday loss to 1.6%, after earlier falling over 3%.
- Spot silver fell over 16% intraday, breaking below the $74 mark.
- London copper futures fell about 1%, breaking below $13,000 per ton.
Singapore iron ore futures fell over 2%, touching an intraday low of $100.25.
- West Texas Intermediate crude fell 2.1% to $63.78 per barrel.
- Bitcoin fell over 3%, further declining after briefly breaking below the $73,000 mark during the session.
AI Fever Cools, Investors Shift to Defensive Sectors
European stocks opened mixed: Euro Stoxx 50 up 0.05%, Germany's DAX down 0.19%, UK's FTSE 100 down 0.3%, France's CAC 40 up 0.2%. Vodafone fell 4.6% as its earnings showed organic service revenue growth missed expectations; wind power giant Vestas fell 4.9%; BNP Paribas rose 4.7% on profits exceeding expectations and raised targets; Maersk fell 7% as the company expects 2026 profits to decline; Volvo Cars fell 14% on Q4 revenue below expectations.
Asian markets extended the selling momentum from Wall Street overnight. According to data compiled by Bloomberg, foreign investors net sold a record 4.99 trillion won ($34 billion) worth of Korean Kospi index constituents on Thursday. Institutional investors also net sold 2.07 trillion won worth of Kospi index constituents.
Nick Twidale, Chief Market Analyst at AT Global Markets, said: "I don't know if we can say tech stocks have peaked, but I do think there is room for further adjustment in the market. The traditional approach is to sell tech stocks and shift to more defensive sectors."
Japan's Nikkei 225 closed down 0.9% at 53,818.04 points. Japan's Topix index closed down 0.1% at 3,652.41 points. South Korea's Kospi closed down 3.9% at 5,163.57 points.
Silver and Gold Plunge, Precious Metals Seek Bottom
Precious metals became another dominant narrative during the Asian trading session. Silver and gold surged last month, supported by speculative momentum, geopolitical turmoil, and concerns about Fed independence. But this rally stopped abruptly last weekend, with silver posting its largest single-day drop on record last Friday, and gold recording its biggest drop since 2013.
Bloomberg strategist Mark Cranfield pointed out: "Traders will watch to see if silver prices break below the low above $71 this week, but arguably more important is the $70 mark. This precious metal hasn't fallen to the $60 range since last December; a return to that range would deepen the risk-off sentiment across all asset classes." Copper prices also extended their decline, with investors focusing on rising inventories.
Spot silver fell over 16% intraday, breaking below the $74 mark. Spot gold broke below $4800 during the session, falling over 3%.
Iron Ore Nears $100 Mark
Iron ore prices fell towards $100 per ton on Thursday, affected by seasonal slowdowns in China, a softening market supply-demand balance, and a general decline in metals. Singapore futures fell over 2%, touching an intraday low of $100.25, on track for their lowest close since last August.
The latest decline reflects the seasonal slowdown ahead of the Lunar New Year holiday later this month, as steel mills scale back and restocking activities conclude, weakening steel demand. Meanwhile, most base and precious metal prices retreated in volatile trading on Thursday.
Fitch's BMI said in a report earlier this week that iron ore is expected to decline amid high port inventories and healthy mine output. The agency expects prices to average $95 per ton this year.
Other Market Dynamics
In other areas of the market, Bitcoin extended its decline, trading below $71,000. The yen fluctuated ahead of Japan's weekend election. The US dollar index extended its gains.
The pound and euro held steady ahead of interest rate decisions due later on Thursday. The European Central Bank and the Bank of England are expected to keep rates unchanged.
In the commodity market, oil fell for the first time after three consecutive days of gains, after Iran confirmed it would hold talks with the US, easing immediate risks of a military strike against the OPEC producer.
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