The sell-off was led by technology stocks, with AI cloud provider CoreWeave falling 10.06%, now down 22% for the year, and Meta dropping 6.98% in regular trading and a further 0.33% overnight. The weakness came amid reports that OpenAI was pressured by private equity investors to reduce its valuation target in its latest fundraising round from $1.4 trillion to $1.25 trillion, reigniting concerns about frothy AI valuations.
Oil prices added to the gloom, with Brent crude rising to $114 per barrel after the Financial Times reported that President Trump's envoy to the United Nations said the U.S. was prepared to fight Iran for at least another year. Prices later eased back to $113.
Meanwhile, yields on France's 10-year government bond hit 5.1%, a new high, before settling at 5.05%, reflecting persistent investor doubt that the French government can resolve its budget crisis. In contrast, the U.S. 10-year yield fell to 4.9% after a recent peak above 5.3%, suggesting some traders are again treating American Treasuries as a safe haven.
Asian markets were mixed: South Korea's KOSPI rose 0.30%, Japan's Nikkei 225 fell 0.34%, India's Nifty 50 dropped 0.96%, and China's CSI 300 gained 1.71% but remains 15% lower for the year. In Europe, the Stoxx 600 lost 0.36% and the FTSE 100 fell 0.56%. Bitcoin declined to $81,683.
Chris Beauchamp, chief market analyst at IG, urged perspective. “It has been a horrible month for tech stocks, but the Nasdaq 100 was at a record high just a few weeks ago … the index is up 20% from a year ago and nearly 30% from March,” he said. “Those screaming that the bubble is popping need to put these moves in context … This is digestion, not a crash.”
Nasdaq futures were up 0.28% before the New York open, while S&P 500 futures were flat, suggesting some traders are buying the dip.