Global Markets, U.S. Futures Steady After Heavy AI-Induced Selling

By Dow Jones Newswires Staff

Global markets and U.S. futures steadied after heavy selling in equities Tuesday on fears of artificial-intelligence threats to major software companies. Software stocks plunged across global markets, dragging major indexes down in the U.S. and pushing the Japanese Nikkei 225 index into the red. European software companies continued to fall at the open Wednesday, though not as steeply as in the previous session. The sharp declines in equities spurred a further fall in cryptocurrencies, with bitcoin hitting a 15-month low overnight.

Traders look to key indicators of U.S. economic health ADP jobs data released later Wednesday, followed by the ISM services survey. The dollar weakened ahead of the releases, while Treasurys held steady. Gold continued to recover after heavy weekend selling, nudging back above $5,100 a troy ounce.

--U.S. futures steadied in early European trade after $300 billion was wiped off software and data stocks Tuesday. The Dow Jones Industrial Average gained 0.2% premarket, while futures for the S&P 500 nudged up 0.1% Nasdaq futures slipped 0.1%. There were signs that software selling could ease at the open, with PayPal and Expedia--two of the heaviest losers Tuesday--both climbing premarket.

Investors watch for earnings from Alphabet and Eli Lilly later Wednesday.

--Software stocks in Asia followed U.S. and European peers down. The Japanese Nikkei 225 was down 0.8% at the open, as information technology provider TIS tumbled close to 16%. Hong Kong's Hang Seng was flat, while China's benchmark Shanghai Composite climbed 0.8%. The Korean Kospi 200 climbed 1.4% as Samsung Electronics continued its charge, closing up 2.05%.

--European indexes gained at the open, though software stocks vulnerable to artificial-intelligence competition continued to fall. The French CAC 40 climbed 0.6% as energy stocks rally, though Publicis fell 3.4% after dropping sharply in the previous session. In London, the FTSE 100 rose 0.6%--with Zurich Insurance takeover target Beazley up 9%--though Sage and Rightmove both dropped around 1.4% after selling off Tuesday on AI threats. The FTSE MIB continued Tuesday's rally in Milan, gaining 0.3% as Mediobanca surged 5.4%. Germany's DAX nudged up 0.1% as automakers gained, though business-software group SAP slipped 1.4%. Spain's IBEX 35 fell 0.1%. as the index's second-largest company, Banco Santander, dropped 3.5% as traders reacted negatively to the bank's purchase of U.S. bank Webster Financial.

--The dollar fell ahead of key jobs data U.S., as the DXY dollar index slipped 0.1% to 97.384. In Europe, the upcoming eurozone flash inflation estimate for January is unlikely to have a material impact on the euro, ING's Francesco Pesole said in a note. The data at 1000 GMT are expected to show inflation easing to 1.8% in January, according to a WSJ survey of economists. "Nothing there to trigger a meaningful change of tone by the European Central Bank tomorrow, in our view," Pesole said. Upcoming U.S. economic data could have a bigger impact, with potentially strong figures dragging the euro below $1.18 in coming days, he said. ING's calculations show the euro is now trading around 0.8% above its short-term fair value. The euro rose 0.1% to $1.1833

--U.S. Treasury yields were little changed in Asian trade ahead of key data prints Wednesday. The 10-year Treasury yield was up 0.3 basis points at 4.274%, while the 30-year Treasury yield was stable at 4.906%, according to Tradeweb. Eurozone government bond yields edge lower in early trade, signaling expectations of a decline in eurozone January inflation. The 10-year German Bund yield declined 0.6 bps to 2.882%, according to LSEG. Meanwhile, supply will come from Belgium's syndication of a new 30-year, June 2056-dated bond, known as OLO, and Germany's auction of the November 2032 Bund. Belgium's previous 30-year, June 2055-dated OLO yield falls 1 bp to 4.312%.

--Bitcoin recovers only marginally after reaching a 15-month low late Tuesday on the back of a selloff in software and data company stocks. Bitcoin rose 0.5% to $76,526 after hitting a low of $72,902 Tuesday, LSEG data show.

--Gold prices extended gains for a second day, climbing back above $5,100 as a historical pullback from record highs offered a buying opportunity for investors. In early trading, New York futures rose 3.4% to $5,102.90 a troy ounce following a 6% jump in the previous session. The recent correction doesn't signal a change in gold's underlying drivers, with the medium-term outlook supported by continued central-bank buying, firm ETF demand, and persistent geopolitical and economic uncertainty.

--Silver prices gained further after the previous session's rally following a historic selloff, with New York futures hovering near $90 a troy ounce. Silver's pullback was far steeper than gold's, as tight liquidity in the London market continued to amplify price swings in both directions. Goldman Sachs cautioned that thin inventories have created squeeze-like conditions, with rallies accelerating as investor demand absorbs available metal and reversing sharply when supply pressures ease. In early trading, silver futures rose 7.5% to $89.57 an ounce.

--Oil prices steadied as traders closely monitored developments in Iran after renewed tensions in the region. The U.S. shot down an Iranian drone aimed at the aircraft carrier USS Abraham Lincoln and a U.S.-flagged ship outran an attempt by armed Iranian gunboats to force it to stop, though negotiations with Washington are still expected this week. "Uncertainty about how talks will play out means the market will likely continue to price in some risk premium," analysts at ING said. Brent crude and WTI settled more than 1.5% higher in the previous session, though they last traded 0.3% an 0.1% lower at $67.11 a barrel and $62.07 a barrel, respectively. Separately, traders await weekly inventory data from the EIA to assess the impact of a massive winter storm that recently hit parts of the U.S.

Write to Barcelona Editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

February 04, 2026 04:49 ET (09:49 GMT)