Stellantis warned of a massive 22 billion euro write-down as electric vehicle demand failed to meet expectations (Thibaud MORITZ) · Thibaud MORITZ/AFP/AFP
US and European stock markets recovered Friday following a tech stocks rout triggered by growing unease about the billions being spent on artificial intelligence.
Oil prices jumped higher after the United States announced new sanctions to curb Iran’s oil exports moments after the adversaries wrapped up a day of indirect talks in Oman.
The recent tech selloff has hit other risk assets, with bitcoin falling further and wiping out all the gains built up since Donald Trump’s US presidential election win.
The digital currency had plunged near $60,000 before paring losses, and has shed nearly half its value since touching a record high above $126,000 in October.
Wall Street’s main equity indices pushed higher on Friday, with the blue-chip Dow setting a fresh all-time high and the tech-heavy Nasdaq Composite climbing 1.5 percent.
“After Thursday’s rout, another recovery is on the cards for markets today,” said XTB research director Kathleen Brooks.
However not all tech stocks were bouncing back.
Shares in Amazon shares dived 7.7 percent after the computing and retail titan reported strong sales but significantly boosted tech-spending estimates after markets closed on Thursday.
“It’s been a week from hell for tech stocks as AI spending plans caused upset across global markets,” said Russ Mould, investment director at AJ Bell.
Shares in Google’s parent company Alphabet were also lower, as were shares in Facebook’s parent company Meta.
Enthusiasm about AI have helped propel tech stocks higher and equity markets to record highs, but investors have recently begun questioning the wisdom of pumping vast sums into the technology with little clarity on the timing of returns.
Sentiment had already been rattled after Anthropic — which created the Claude chatbot — unveiled this week a model that could replace numerous software tools, including for legal work and data marketing.
After steep losses Thursday, European markets all pushed higher.
“For Europe, this period has highlighted the relative safety of assets aligned with the real economy rather than technology,” said Joshua Mahony, chief market analyst at Scope Markets.
Meanwhile Asian markets turned in mixed performances.
Seoul — which had led the region’s January rally thanks to its heavy tech weighting — ended 1.4 percent lower as it tracked losses on Wall Street.
In company news, shares in Jeep maker Stellantis plunged over 24 percent in Paris after warning of a 22-billion-euro ($26-billion) write-down due to misjudging the shift in demand to electric vehicles.