Calm after CoreWeave shock, but for how long?
SPY•Asian stocks rose into the weekend after Thursday’s sharp selloff, with South Korea’s KOSPI up about 3% and Japan’s Nikkei up 1.5%. US and European stock futures edged higher, while investors continued to assess AI-related debt concerns and the outlook for interest rates.
1. Asian stocks rebound
Asian stocks rose into the weekend, with bargain hunters likely leading the buying after Thursday’s market plunge. South Korea’s KOSPI gained around 3% after falling nearly 8% on Thursday, while Japan’s Nikkei advanced 1.5% after dropping about 5%; US and European stock futures also edged higher.
2. AI concerns persist
Fears about debt financing for the AI boom remained after yields on AI cloud provider CoreWeave rose to levels associated with distressed debt. Reported progress by China’s CXMT on next-generation DRAM architecture also weighed on confidence in established manufacturers such as SK Hynix and Micron. Analysts expect volatility to remain elevated as technology earnings arrive over the coming weeks.
3. Rates remain in focus
Investors continued to watch interest-rate signals from the Federal Reserve and other major central banks. Markets saw about a 28% chance of a US rate hike at the end of the month. Bank of England Governor Andrew Bailey said soaring energy prices linked to the Iran war had so far had limited impact on wider UK inflation, but it was too soon to draw firm conclusions.
