Stock Market Update

U.S. equity futures remain mostly lower, with tech stocks continuing to face pronounced weakness in the premarket.

Asian markets sold off sharply on Thursday, extending the pressure from hotter-than-expected U.S. inflation as mounting concerns over the sustainability of AI investment intensified the technology rout. Japan's Nikkei 225 plunged 4.9% in its biggest one-day decline since March, with Advantest (-14%), Lasertec (-13%), Kioxia (-13%), Taiyo Yuden (-10%), and SoftBank Group (-9%) leading the retreat, while stronger-than-expected machinery orders contrasted with another decline in industrial production. South Korea's KOSPI tumbled 7.0%, with SK Hynix (-11%) and Samsung Electronics (-9%) hammered amid concerns about increasing Chinese competition in memory chips. China's Shanghai Composite fell 1.6% and the Shenzhen Component dropped 2.4%, sending both to their lowest levels since July 2025 as renewed China-EU trade tensions compounded weakness in AI-related shares. Hong Kong's Hang Seng declined 1.0%, with Lenovo (-15%), Z.AI (-10%), Kingboard Laminates (-10%), and SMIC (-4%) extending the regional technology selloff. India notably bucked the regional rout, with the Sensex surging about 2% as IT shares rallied amid a rotation away from expensive AI-linked stocks, while strength in financials and Reliance Industries and a pullback in oil prices provided additional support. TSMC reported a 69% yr/yr increase in third-quarter profit and forecast stronger-than-expected fourth-quarter revenue, providing a positive read on underlying AI demand but doing little to stem the broader semiconductor rout.

• In economic data:
  • Japan's August core machinery orders increased 5.2% m/m (expected 2.2%; prior -3.7%) and 18.6% yr/yr (expected 15.7%; prior 11.2%).
  • Japan's August industrial production decreased 2.4% m/m (expected -1.7%; prior -0.2%).
  • Japan's August capacity utilization decreased 4.2% m/m (prior 0.5%).
  • South Korea's September trade surplus widened to $49.97 bln (expected $49.85 bln; prior $34.79 bln). Exports increased 83.7% yr/yr (expected 83.5%; prior 68.7%), and imports rose 26.0% (expected 26.0%; prior 22.4%).
  • Australia's September employment declined by 39.3K (expected 19.6K; prior 29.3K), while full employment increased by 34.4K (prior -4.0K). The unemployment rate was 4.7% (expected 4.6%; prior 4.7%), and the participation rate fell to 66.8% (expected 67.0%; prior 67.0%).

European markets trade mixed, holding up considerably better than Asian equities as the global technology selloff weighs most heavily on markets with greater AI exposure. Germany's DAX falls 0.4%, with Infineon (-9%), Siemens Energy (-7%), and Hochtief (-4%) among the laggards as concerns surrounding AI investment and elevated financing costs pressure technology-related shares. France's CAC 40 gains 0.2% despite weakness in STMicroelectronics (-7%) and Schneider Electric (-5%), while Pernod Ricard (+3%) advances after reporting a smaller-than-expected decline in quarterly sales. London's tech-light FTSE 100 outperforms with a 0.6% gain and trades near a four-week high after U.K. GDP unexpectedly expanded 0.1% m/m in August, with British American Tobacco (+3%), Unilever (+2%), AstraZeneca (+1%), and GSK (+1%) providing support. Mining shares buck the strength in London, with Antofagasta (-6%), Anglo American (-5%), Rio Tinto (-4%), and Glencore (-3%) retreating, while France's annual inflation rate was revised up to 3.1% in September. The broader STOXX Europe 600 slips 0.3%, while Italy's FTSE MIB falls 0.8% and Spain's IBEX 35 trades little changed.

• In economic data:
  • Eurozone industrial production decreased 0.5% m/m in August (expected 0.0%; prior -0.3%) and 1.1% yr/yr (expected -0.1%; prior -0.3%).
  • U.K. GDP increased 0.1% m/m in August (expected -0.1%; prior 0.4%) and 2.1% yr/yr (expected 1.7%; prior 1.8%). Three-month growth was 0.7% (expected 0.5%; prior 0.5%).
  • U.K. industrial production increased 0.8% m/m in August (expected -0.1%; prior 0.3%) and 1.6% yr/yr (expected 0.7%; prior 0.8%). Manufacturing production rose 1.2% m/m (expected -0.1%; prior 1.0%) and 3.0% yr/yr (expected 2.3%; prior 2.2%).
  • The U.K.'s August trade deficit narrowed to GBP18.01 bln (expected GBP21.90 bln; prior GBP19.30 bln).
  • U.K. construction output decreased 0.2% m/m in August (expected 0.0%; prior -0.5%) and 1.8% yr/yr (expected -1.6%; prior -1.9%).
  • France's September CPI decreased 0.3% m/m (expected -0.3%; prior 0.7%) and increased 3.1% yr/yr (expected 3.0%; prior 2.4%). HICP fell 0.3% m/m (expected -0.4%; prior 0.4%) and rose 3.4% yr/yr (expected 3.4%; prior 3.4%).
  • Switzerland's September PPI increased 0.3% m/m (expected 0.6%; prior 0.7%) and decreased 0.2% yr/yr (prior -0.7%).