European Stocks Drop With US Tech Rally Faltering: Markets Wrap

(Bloomberg) — European stocks retreated, tracking tech-led declines on Wall Street and dragged lower by a slump in the shares of Airbus SE.

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The Stoxx 600 Index fell 0.3% as technology firms and industrials weighed on the benchmark gauge. Airbus tumbled almost 10% after lowering its guidance amid persistent supply-chain issues. Suppliers to the planemaker also fell. Contracts on US stocks were little changed after Nvidia Corp. extended a three-day rout on Monday, though various US non-tech sectors advanced.

With the quarter drawing to a close, investors are snatching up value stocks and rotating out of the technology sector into other parts of the market. In Europe, investors will be keeping a keen eye on France’s main political parties as they hold a debate Tuesday evening ahead of the first round of legislative elections on Sunday.

“As we approach the quarter-end, global investors are rebalancing their portfolio, selling assets that have performed well recently and buying names that have lagged,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management Co.

The dollar traded steady and US Treasuries posted small moves.

The retreat in technology shares is “not a macroeconomic story, it is purely an investor/sentiment story about the reversal of the massive AI-related outperformance observed year-to-date,” Danske Bank analysts wrote in a note. “It is challenging to determine whether this marks the beginning of a lasting trend, as the fundamentals remain unchanged from a week ago.”

Separately, the US is investigating China Mobile, China Telecom and China Unicom over concerns the firms could exploit access to American data through their US cloud and internet businesses by providing it to Beijing, Reuters reported, citing three unidentified people familiar with the matter.

In commodities, oil held gains as investors weighed the potential fallout from rising geopolitical tensions. Gold edged lower, while Bitcoin rebounded after falling Monday.

Key events this week:

• US Conference Board consumer confidence, Tuesday

• Fed’s Lisa Cook, Michelle Bowman speak, Tuesday

• US new home sales, Wednesday

• China industrial profits, Thursday

• Eurozone economic confidence, consumer confidence, Thursday

• US durable goods, initial jobless claims, GDP, Thursday

• Nike releases earnings, Thursday

• Japan Tokyo CPI, unemployment, industrial production, Friday

• US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday

• Fed’s Thomas Barkin speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.3% as of 8:39 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures were little changed

• Futures on the Dow Jones Industrial Average rose 0.1%

• The MSCI Asia Pacific Index rose 0.9%

• The MSCI Emerging Markets Index was little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0725

• The Japanese yen rose 0.1% to 159.46 per dollar

• The offshore yuan was little changed at 7.2859 per dollar

• The British pound was little changed at $1.2689

Cryptocurrencies

• Bitcoin rose 2.3% to $60,831.98

• Ether rose 1.6% to $3,363.57

Bonds

• The yield on 10-year Treasuries was little changed at 4.24%

• Germany’s 10-year yield declined two basis points to 2.40%

• Britain’s 10-year yield declined one basis point to 4.07%

Commodities

• Brent crude was little changed

• Spot gold fell 0.4% to $2,326.32 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Toshiro Hasegawa, Aya Wagatsuma and Sujata Rao.

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