Global financial markets experienced a downturn on February 13th. US stock indices closed lower, with the Nasdaq Composite falling 2%, as advancements in artificial intelligence continued to exert pressure on various sectors. Among the top 20 stocks by trading volume, Cisco Systems saw a significant decline of 12.3%, pressured by ongoing surges in memory chip prices impacting its financial performance. Most popular US-listed Chinese stocks also trended downward, with Trip.com Group dropping 6.01% and Tencent Music Entertainment falling 10.57%.
Oil prices declined on Thursday following a downward revision to demand forecasts by the International Energy Agency. Precious metals faced a sudden sell-off, while European equity markets also fell as a widespread risk-off sentiment prevailed.
In macroeconomic developments, European Central Bank Governing Council member Joachim Nagel warned that escalating geopolitical tensions could lead to higher inflation. In the US, Senate Majority Leader indicated that negotiations for Department of Homeland Security funding would continue in the coming days. Former President Donald Trump commented that Iran must reach an agreement with the United States or face a difficult second phase, predicting negotiations could conclude within a month. Meanwhile, Republican Senator Thom Tillis opposed the Senate taking over an investigation into Fed Chair Jerome Powell, leaving the confirmation path for a nominee like Kevin Warsh still obstructed. In a related development, Senator Tillis blocked a "settlement proposal" concerning a criminal investigation into Chair Powell. European bond markets saw German bunds post modest gains, though they still underperformed compared to US Treasuries amid the sell-off in US tech stocks. US existing home sales recorded their largest decline in nearly four years, partly attributed to disruptions from winter storms. The White House border affairs chief stated that former President Trump agreed to end an immigration enforcement operation in Minnesota.
In corporate news, Anthropic completed a financing deal valuing the company at $380 billion, raising $30 billion. Citigroup increased its CEO Jane Fraser's annual compensation to $42 million. Italian tax authorities conducted a search of Amazon.com's offices in Milan. Denmark's second-largest pension fund is considering reducing its exposure to the US market to assess potential investment risks. Logistics stocks in US and European markets collectively dropped, becoming another casualty of the "AI panic trade." The US Federal Trade Commission alleged that Apple News favors left-leaning media and suppresses conservative content. Forbes released its inaugural "Innovators 250" list, with OpenAI's CEO ranking 6th. US initial jobless claims saw a slight decrease after a previous surge due to severe winter weather.
In market commentary, the Bloomberg Dollar Index stabilized after four consecutive days of declines, while safe-haven buying supported the Japanese Yen and Swiss Franc. The US bond market saw long-term bonds leading gains, with a strong auction for 30-year Treasuries. Hedge fund manager David Einhorn is betting on significant interest rate cuts by the Federal Reserve, calling it one of his "best trades." The sharp sell-off in gold and silver was triggered by algorithmic selling following the stock market plunge. US commercial real estate stocks fell sharply as AI-related anxieties spread further. The landscape for artificial intelligence saw another shift, bringing stocks within the OpenAI ecosystem back into focus on Wall Street. European bond markets mirrored earlier movements with German bunds posting small gains but lagging behind US Treasuries during the tech stock decline. Analysts at Morgan Stanley suggested that the sell-off in wealth management stocks triggered by AI concerns may have been overdone.