European stocks rise, dollar set for weekly loss after yields drop
SPY•European stocks rose as markets steadied after a tech-led selloff, while the dollar headed for its first weekly loss in four weeks as lower U.S. Treasury yields reduced its appeal. The STOXX 600 was up 0.6%, while the MSCI World Equity Index gained 0.4% but remained on track for a weekly loss.
1. Stocks recover
European stocks rose on Friday as markets stabilised after a sharp tech-led selloff. The STOXX 600 gained 0.6%, Germany’s DAX rose around 1% and France’s CAC 40 added 0.5%; the MSCI World Equity Index was up 0.4% but remained set for a weekly loss. U.S. stock futures pointed to a recovery, though Nasdaq futures remained lower.
2. AI debt concerns
Markets had been rattled by concerns over higher interest rates and debt-fuelled financing behind the AI boom, prompting a selloff in technology and chip stocks. Investors remained concerned about credit risks linked to the AI trade, particularly among heavily indebted data-centre operators such as CoreWeave. Amelie Derambure of Amundi said questions about monetization and the sustainability of profits and margins remained unanswered.
3. Dollar and bonds
The dollar fell 0.4%, with its index at 101.65, and was on track for its first weekly decline after three weeks of gains as lower Treasury yields reduced its appeal. G7 government bond markets were headed for their strongest weekly performance since late May, while European government bond yields edged higher on Friday but remained lower for the week.
