U.S. Futures Fall, Bitcoin Stays Low as Riskoff Sentiment Continues

By Dow Jones Newswires Staff

U.S. futures pointed to another day of losses for stocks as fears over the scale of artificial-intelligence spending, as well as disruption from AI startups weighed on sentiment. Amazon followed Alphabet in announcing capital-spending plans well above Wall Street expectations--commitments that spooked markets and weighed on tech and software stocks in Asia and Europe. The selloff spilled into bitcoin--which steadied close to $65,000 after recording its worst trading day since June 2022--and precious metals.

Market sentiment was further dampened by a spike in U.S. jobless claims, as U.S. Treasury yields fell to three-week lows on concern over labor-market weakness. Oil prices fell on coming talks between the U.S. and Iran.

--U.S. futures nudged down in early European trade, with selling focused in the tech-heavy Nasdaq. The index falls 0.3% premarket, with Amazon falling 9.4% premarket, as it looks set to extend its worst three-day run since the fallout from President Trump's "Liberation Day" tariffs in April. Futures for the Dow Jones Industrial Average and the S&P 500 both traded down 0.1%.

--Most Asian equity markets declined, tracking overnight losses in the U.S. Fears surrounding AI spending led to losses across tech and software stocks on the continent. South Korea's Kospi fell 2.7% as semiconductor chip bellwethers Samsung Electronics and SK Hynix both closed down. Hong Kong's Hang Seng Index dropped 1.1% and Singapore's FTSE Straits Times Index declined 0.7%. Japan's Nikkei 225 edged 0.3% higher ahead of weekend general elections.

--European equity indexes largely fell at the open, following Asian stocks down as another Anthropic release hit software stocks. The U.K.'s FTSE 100 was down 0.3%, as software provider RELX dropped 4.6%. London Stock Exchange Group and Sage both fell around 3.5%. Software stocks also slipped in France, with the CAC 40 down 0.3%. Dual-listed automaker Stellantis plummeted by 15% after guiding for heavy losses, knocking indexes in both Paris and Milan. The FTSE MIB was down 0.5%, where luxury stocks also fell. The German DAX traded flat as healthcare and consumer cyclical losses countered gains for utilities. Spain's IBEX 35 nudged up 0.1% after initially falling, as basic-materials companies boosted the sector.

--The dollar shrugged off weak U.S. jobs data to trade steady after reaching a two-week high on Thursday. Trump's nomination of Kevin Warsh as Federal Reserve chair has lifted the dollar as markets bet that he will take a restrictive policy stance and uphold central-bank independence. Markets aren't fully pricing in another interest-rate cut until June, LSEG data showed. The DXY dollar index traded flat at 97.819.

The euro rose 0.1% to $1.1787 after European Central Bank President Christine Lagarde hinted against further ECB rate cuts this year. Sterling rose 0.3% to $1.3565 after hitting a two-week low of $1.3506 overnight.

--U.S. Treasury yields declined in Asian trade with the 10-year yield falling to a three-week low of 4.156% overnight before rebounding slightly, according to Tradeweb data. The 10-year Treasury yield last traded at 4.189%, down 2 basis points on the day. Eurozone government bond yields fell in opening trade, tracking Treasury yields down. Apart from a small-volume Belgian optional reverse inquiry auction, there is no government bond issuance in the eurozone on Friday. The 10-year Bund yield fell 3bps to 2.812%, while the 10-year French OAT yield slides 2bps to 3.427%, according to LSEG.

--Bitcoin recovered slightly but remained below $70,000 after reaching its lowest level since October 2024 overnight. "A number of retail investors buying cryptocurrencies are also likely long tech as both were favored among retail investors," Jefferies economist Mohit Kumar said in a note. Bitcoin rose 3.4% to $65,266 after hitting a low of $60,008 overnight, LSEG data showed.

--Oil prices edged higher in early trading but are on track for their first weekly decline in several weeks, as markets focus on U.S.-Iran talks. Brent crude and WTI both rose 1.1% to $68.28 a barrel and $63.13 a barrel, respectively. The benchmarks, however, were down more than 1% for the week as negotiations between Washington and Tehran have eased concerns over potential U.S. military action that could threaten oil infrastructure in the region. Still, tensions remain elevated. "The two sides remain well apart," analysts at ANZ Research said. "This should see the geopolitical risk premium remain in place."

--Gold prices remained below $5,000 as volatility stayed high after last week's historic rout, with exchange operator CME Group raising margin requirements for precious metals once again. Futures in New York ticked 0.1% higher at $4,891.10 a troy ounce and are headed for a weekly gain of 3%. Meanwhile, silver fell 4.1% to $73.56 an ounce, on track for a weekly decline of more than 6%. "Until volatility subsides and price discovery improves, gold, and especially silver, is likely to trade violently in both directions," Ole Hansen from Saxo Bank said.

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(END) Dow Jones Newswires

02-06-26 0450ET