SummaryCompaniesAsian markets hit by negative China export dataSentiment shifting for AI rally; Softbank tanksUS stock futures lowerLONDON, Nov 7 (Reuters) – Tech-heavy stock markets were heading for their biggest weekly fall in seven months on Friday, as investors fretted over the sustainability of a rally in artificial intelligence stocks.Weaker-than-expected China trade data also showed how hard U.S. President Donald Trump’s tariffs have hit.
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The STOXX benchmark of 600 big European companies slipped 0.6% and U.S. markets looked set to open lower judging by trade in stock futures , following an almost 2% drop for the Nasdaq (.IXIC), opens new tab on Thursday.For the week so far, the world’s biggest tech index is down 2.8%, which if sustained would mark its largest one-week drop since April, when tariffs were announced. The Nasdaq has gained more than 50% since then.”Equity markets have been on a tear for multiple years so it is natural to say there should be a pull back in the future,” said Victor Zhang, Chief Investment Officer for American Century Investments.”When you look at the fundamentals in the economy around the world, the U.S., emerging markets are experiencing strong growth and while there is some weakness that is at a healthy level.”China’s exports shrank 1.1% in October, the worst performance since February, data showed, chilling Asian markets with a stark reminder of the manufacturing juggernaut’s reliance on American consumers.China’s blue-chip CSI300 Index (.CSI300), opens new tab and the Shanghai Composite Index (.SSEC), opens new tab both finished 0.3% lower on Friday.Japan’s Nikkei (.N225), opens new tab fell 1.2% to head for a weekly loss of 4.1%, the largest since April, while in Seoul the KOSPI (.KS11), opens new tab fell 1.8% for a 3.7% weekly fall, the largest since February.Chip and cable makers were among the biggest losers, with tech investor Softbank Group Corp (9984.T), opens new tab down nearly 20% this week. Bitcoin , sometimes a bellwether for tech sentiment, is down 8% on the week to $101,525.
FEARS OVER BUBBLE IN AI STOCKS
Women holding umbrellas stand in front of a stock quotation board outside a brokerage in Tokyo, Japan June 30, 2025. REUTERS/Issei Kato Purchase Licensing Rights, opens new tabThere has been no obvious trigger for the pullback in AI-related share prices but the market reaction to recent results shows how some of the fears about a bubble in the sector and questions about profitability are starting to surface.Late last month, Meta (META.O), opens new tab stock dived after the company outlined big capital expenses as it builds data centres in an AI push. Shares in data and AI firm Palantir Technologies (PLTR.O), opens new tab have also tumbled despite beating earnings forecasts.”Sometimes it’s a gradual shift in markets whereby an increasing number of people say: ‘Well, I’m well positioned … maybe I’ll take some money off the table,'” said Herald van der Linde, head of equity strategy for Asia Pacific at HSBC.”And a second one says so. And a third one. And a fourth one says, hey, these three are selling. I might maybe be selling as well, right? So it’s a shift in the market sentiment that has its own sort of dynamic. That might well be unfolding a little bit now.”
FOCUS ON SHUTDOWN, FED
In bond markets, borrowing costs in the euro area and U.S. were little changed while UK yields edged higher.The dollar was set to end the week roughly unchanged as investors sought to balance the Federal Reserve’s hawkish tilt against lingering concerns over the U.S. economy.The U.S. shutdown has prevented the release of key economic data. Still, data signals from surveys suggest a resilience that could support the case for not cutting rates at the Fed’s December meeting.The dollar index , which measures the currency’s strength against a basket of six peers, was a touch lower at 99.66, while the euro was up 0.1% at $1.1557 .The safe-haven yen was steady at 153.05 per dollar.Gold traded 0.5% higher near $4,000, down from a record high of $4,381.21 on October 20.Oil prices rose slightly following three days of declines on worries about excess supply and slowing demand in the U.S., with Brent crude futures up 54 cents, or 0.8% to $63.90 a barrel.
Reporting by Lawrence White and Dhara Ranasinghe; Editing by Louise Heavens
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