Wall Street opened in the red on Friday, with the Dow Jones Industrial Average dropping 209 points (0.45%) to 46,703, the S&P 500 falling 0.6%, and the tech-heavy Nasdaq losing nearly 1%. The sell-off reflects growing jitters over the health of the US economy and sky-high technology valuations, with the Nasdaq on track for its worst weekly performance since March.
European markets also suffered, with the FTSE 100 closing down 95 points (almost 1%) at 9,640, its lowest level in two weeks. The pan-European Stoxx 600 index fell 0.6% on the day, posting a weekly loss of 1.3% – the biggest since late August. Analysts noted that risk appetite continued to weaken as a brief bout of dip-buying faded.
The sell-off was driven by anxiety over the ongoing US government shutdown, a lack of economic data, and warnings that the artificial-intelligence-led rally may have come to a halt. US tech groups closely tied to the AI boom have lost more than $1tn in market value since last Friday, according to the Financial Times. The Nasdaq Composite ended the day down 2%, adding to earlier losses.
Further dampening sentiment, the University of Michigan consumer sentiment index dropped to 50.3 in November from 53.6, below expectations of 53.0. ING chief international economist James Knightley described the current conditions series as hitting an all-time low, likely due to government shutdown concerns and non-payment of wages. This followed a report that US job cuts jumped in October.
In London, ITV shares soared after it confirmed preliminary talks to sell its broadcasting arm to Sky's parent company in a potential £1.6bn deal. Meanwhile, Rightmove finished as the top faller, down 12.5%, after outlining plans to increase spending on artificial intelligence. UK house prices rose at their fastest pace since January, according to a leading property index.
