US Equities Plunge as AI Concerns Return: The S&P 500 fell 4.4% yesterday, wiping approximately $2.9 trillion from company valuations, while the Nasdaq 100 declined 6.4%. Nvidia dropped 9.3% to around $181.50, and the VIX surged nearly 70% to 28.2. Wednesday’s optimism over a possible end to the Iran war gave way to concerns that tighter restrictions could slow the AI investment boom.
Hedge Fund Losses Add to Market Unease: Losses across the hedge fund industry added to investor concerns. Walleye Capital is returning some investor capital and reducing its equities business following its worst monthly performance since March 2020.
Sell-Off Spreads Across Asian Markets: The decline extended into Asia, with Japan’s Nikkei 225 falling around 6%, South Korea’s KOSPI dropping as much as 8.8% and Taiwan’s TAIEX closing 4.5% lower. South Korea has temporarily waived a rule requiring brokerages to maintain collateral equal to 140% of their margin loans.
Data Centre Restrictions Weigh on AI Outlook: Newly elected Texas Governor Gina Hinojosa has called for a pause in data centre development until protections for residents are introduced. Around 41% of planned US data centre capacity is located in states where governors or governors-elect have promised, or already imposed, pauses on construction.
Oil Recovers as Investors Seek Safety: Brent crude recovered towards $100 a barrel after fresh tanker attacks renewed concerns over Middle Eastern energy supplies. US government bonds held their recent gains as investors continued to move towards safer assets.
Bank of England Raises Rates to 4%: The Bank of England raised interest rates by 25 basis points to 4% yesterday, as expected. All nine policymakers supported an increase, with one favouring a larger move. The Bank expects inflation to reach around 5% by mid-2027, while the probability of another increase in December rose from 28% yesterday afternoon to 44% this morning.
US Payrolls in Focus: Attention now turns to today’s US nonfarm payrolls report at 1:30 pm. The economy is expected to have added 65,000 jobs in October, up from 29,000 in September. Unemployment is forecast to remain at 4.2%, while annual wage growth is expected to ease to 2.9%.
Economic Calendar
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US Nonfarm Payrolls
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US Unemployment Rate
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US Average Hourly Earnings
Key Market Moves Today
- S&P 500 Futures: -4.40% (7,383)
- Crude Oil: +0.66% ($91.10)
- Spot Gold: -0.80% ($4,054)
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