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Nasdaq's worst day since June and Brent near $113 set a grim backdrop for Dalal Street
A rout in chip stocks pulled the Nasdaq down 2.6% on Thursday as fears over AI spending returned. Oil hit its highest since May, US bond yields tumbled and the rupee slipped to 94.82, leaving Indian shares facing a fourth difficult session.
Key points
- The Nasdaq fell 2.6% to 26,008.86, its biggest drop since June, while the Dow ended flat.
- Brent crude climbed above $113 a barrel, its highest level since May, on Saudi attacks and Iran strike fears.
- The Sensex closed 460.30 points lower on Thursday and the rupee fell 44 paise to 94.82.
Indian shares head into Friday’s session with little help from abroad. A sell-off in technology stocks dragged the Nasdaq Composite down 2.6% on Thursday, its sharpest fall since June, while Brent crude climbed to its highest level since May as attacks in Saudi Arabia and talk of fresh strikes on Iran kept the oil market on edge.
The Nasdaq lost 694 points to end at 26,008.86 and the S&P 500 fell 1.21% to 7,663.43. The Dow Jones Industrial Average, lighter on technology, finished almost exactly where it began, up 11.89 points at 52,867.98, as money moved into financial and defensive shares.
A chip rout
The pain was concentrated in chipmakers and the companies building artificial intelligence capacity. The Philadelphia Semiconductor Index dropped 6.7%. Meta Platforms fell about 7% after its results showed spending on AI rising again and its first negative free cash flow as a listed company. Nvidia, Micron, Amazon and Alphabet all lost ground.
“The problem is how everyone can finance it all at the same time,” said Michael Antonelli, market strategist at Baird Private Wealth Management. IBM chief executive Arvind Krishna said clients “are also getting worried if some of the AI spending is completely out of control with no real return”.
Oil, bonds and gold
Brent rose above $113 a barrel at one point. Traders reacted to Saudi reports of attacks on the Dammam airport and an Aramco oil field, and to a report that the United States and Israel had drawn up plans for renewed strikes on Iran after the 3 November US midterm elections.
US Treasuries rallied hard. The 10-year yield fell about 19 basis points to roughly 4.95%, back below 5% and its largest one-day drop since the regional banking crisis of March 2023. Gold went the other way, sliding about 2% to near $4,061 an ounce, a low of more than two months, as dearer oil revived inflation worries.
How India ended Thursday
At home, the Sensex fell 460.30 points to 73,249.39 and the Nifty 50 lost 123.70 points to 22,687.65, a third straight losing day. Asian markets had already slumped on Thursday, with the Hang Seng down 2.73% and the Kospi 2.27% in morning trade.
The rupee gave up much of Wednesday’s gain, closing 44 paise weaker at a provisional 94.82 to the dollar. Brent’s jump was the main drag. “Brent crude surged 3 per cent following attacks on Saudi Aramco’s oilfield,” said Sunny Aggrawal, head of fundamental research at SBI Securities. Foreign investors had bought ₹1,022.32 crore of Indian shares on Wednesday.
What to watch on Friday
Indian technology shares face a double test: the overnight fall in their US peers and Infosys’s results, due after the market closes. Jio Platforms’ share sale, already subscribed more than five times, also closes on Friday. With oil above $110, traders will be watching for any easing in West Asia before betting on a rebound.