European Shares Seen Lower After Tech Rout On Wall Street

(RTTNews) - European stocks look set to open on a sluggish note on Friday after a Wall Street rout wiped out roughly $2.5 billion in market value and sent the Nasdaq into correction territory overnight.

U.S. equity futures were mixed this morning following a heavy sell-off in companies exposed to AI data centers, including crucial chipmakers and semiconductor manufacturers amid concerns over valuations and whether substantial AI spending can generate sufficient returns.

Meanwhile, after two Federal Reserve officials supported modest and steady interest-rate increases, traders now await the all-important U.S. October payrolls report later in the day for more clues on a possible rate hike in December.

Economists expect employment to increase by 62,000 jobs in October after an increase of 29,000 jobs in September. The unemployment rate is seen holding at 4.2 percent.

Asian markets were mostly lower, with benchmark indexes in Japan and South Korea plummeting 5-6 percent as fears of tighter data center regulation spread.

The U.S. dollar was seeing some positive traction, drawing support from haven demand as investors try to get a sense of how much deeper the technology selloff can go.

U.S. government bond yields ticked lower, with the 2-year Treasury yield dropping about 10 basis points to roughly 4.47 percent. Gold prices fell nearly 1 percent to $4,052 an ounce but were on course for their strongest weekly advance since August.

Brent crude futures rose more than 1 percent toward $100 a barrel but were on track for a weekly loss of about 11 percent on hopes of de-escalation in the U.S.-Iran conflict and a possible reopening of the Strait of Hormuz.

On Thursday, U.S. President Trump said Iran could not do anything regarding its nuclear program without Washington's approval and that he would have to decide whether the U.S. should take further action against Tehran or accept the current situation.

U.S. stocks crashed overnight after celebrating the election result a day before on optimism that a divided Congress could limit policy shocks, temper spending and reduce some of the economic risks.

While the midterm elections helped remove uncertainty, fresh doubts have emerged over the speed at which data centers could be approved, powered and built.

Adding to investor anxiety, Cleveland Federal Reserve President Beth Hammack and Richmond Fed Chief Thomas Barkin made a case for modest and steady interest-rate increases to bring inflation back to 2 percent.

The Nasdaq Composite nosedived 5.5 percent, marking its largest single-day drop in 19 months and confirming a technical correction on concerns about whether the huge amounts being spent on AI will pay off.

The S&P 500 plummeted 4.4 percent to mark its worst performance since the April 2025 tariff meltdown as Texas governor-elect Gina Hinojosa called for a longer data center moratorium in the state, followed by tighter regulation. The narrower Dow tumbled 3.4 percent.

European stocks reversed course to end mostly lower on Thursday as AI spending worries intensified and the Bank of England raised its key interest rate for the first time since 2023.

The pan-European STOXX 600 fell 0.4 percent. While France's CAC 40 edged up 0.3 percent, the German DAX and the U.K.'s FTSE 100 dropped around 0.4 percent each.