GLOBAL MARKETS-Wall Street set to stabilise after multi-trillion dollar tech plunge

Wall Street looked set to stabilise on ​Friday, after fears about tighter AI regulations in the United States had wiped trillions of ‌dollars ​off world stock markets' value and triggered a dash for safe-haven government bonds. Europe's main bourses tumbled over 1.5% as the turmoil continued to play out, but with Nasdaq futures pointing 1.5% higher and Wall Street's VIX fear gauge also easing, investors were hoping for a respite of sorts.

Key AI stocks were mixed. Nvidia rose 4.5% in premarket trading, after suffering its worst day since January 2025, when the emergence of low-cost Chinese AI ‌model DeepSeek hammered markets. Other heavyweight chipmakers, including AMD, Intel , Broadcom and Micron Technology, were up between 4.5% and 8%, while Elon Musk's Tesla and SpaceX were also up 2% and 4% after losses earlier this week.

The expected bounces were in stark contrast with market action in the rest of the world. In Asia, Japan's Nikkei and South Korea's KOSPI both slumped about 6%. For the Nikkei — just like Wall Street the previous day — it was the biggest one-day drop since US President Donald Trump's "Liberation Day" trade tariff panic of April 2025.

Taiwan's benchmark plunged more than 8% at one point, before cutting losses ‌as authorities scrambled to stem the selling. "This has been brutal," James Athey, a fund manager at investment firm Marlborough in London, said, explaining that retail and hedge fund selling had been feeding off each other.

"The question is where we go now? We are still looking ‌at indexes that are near record highs and a sector (AI) where capex is still massive," Athey said. "So I think it is going to be a huge test of market sentiment - and the belief in AI - in the coming days." PAYROLLS BEAT FORECASTS

The strain on equities meant the US dollar, Japanese yen and Swiss franc all lured safe-haven flows, although the rally in government bonds took a breather. The yield on the benchmark US 10-year Treasury note ticked up to 4.86% in Europe, having dropped to its lowest level since September 9 overnight.

US nonfarm payrolls, usually one of the most-focused on pieces of data, but largely overshadowed by the tech drama, showed a stronger-than-expected 165,000 pickup in jobs. An anticipated slowdown in annual ⁠wage growth to ​below 3% for the first time in nearly 5-1/2 years did not materialise either ⁠as it came in at 3.1%.

Japan's 10-year bond yield dipped as far as 1.795% overnight, the lowest since June 30. The yield on triple-A-rated German bunds fell to its lowest level since late August early on in Europe too before nudging back up to 3.25%. Oil prices tiptoed back up towards $100 a barrel, but are still set for their ⁠biggest weekly drop though since 2020 on hopes the midterms' results might prompt Trump to de-escalate the Iran war.

"Bonds are increasingly behaving like bonds again, with income re-emerging as the primary driver of returns," said Masahiko Loo, chief fixed-income strategist at State Street Investment Management. P-AI-N TRADE

The rise in Nasdaq futures and the dip in the VIX ​pointed to a return to relative calm later, although nerves around the AI boom have ratcheted up significantly since this week's historic Democrat wins in US midterm elections. Texas' Democratic Governor-elect Gina Hinojosa said on Thursday that the state — which already has a ⁠large share of US data centres — will introduce new laws to protect local communities from their further mass buildup.

The tech-heavy Nasdaq slumped 5.5% on Thursday — or $2.5 trillion. Some $3 trillion was also wiped off S&P 500 firms, with investors worried the brakes will soon be applied to the AI boom more broadly. "It's actually a bit of a disaster," said Christopher Forbes, head ⁠of ​Asia and Middle East at CMC Markets.

"All night, all day – we had client margin calls, client complaints ... because it's a very emotional thing, right? People are wedded to their positions and views on a stock or outcome and you're telling them, look, you've just lost money." The jitters are hitting an AI trade already under pressure from fears that the massive cost of the data centres and other infrastructure will limit future returns, spurring margin calls and spooking retail investors and hedge funds alike.

AUTHORITIES ATTEMPT TO SOOTHE NERVES Some of Asia's authorities stepped in overnight to ⁠try to soothe nerves.

South Korea temporarily eased rules on retail investors' leveraged investments and multiple sources told Reuters that Taiwan's Ministry of Finance called senior executives at state-owned banks, instructing them to support the market. Taiwanese stocks closed down 4.5%, recovering somewhat from their early morning slump. ⁠For the week though, the index lost 12.2%, its biggest weekly drop since ⁠1991, LSEG data showed.

Korean AI chipmakers also trimmed some of their losses although still closed sharply lower. In Japan, tech investor SoftBank slid 11%, with the cost of insuring its debt against a default jumping to its highest in four years. "After damage like the sort we've been facing, it is difficult to think that we simply can bounce from here," said Steve Sosnick, chief strategist at Interactive Brokers.

"We may be ‌oversold in the short term, but the underlying questions ‌and causes can't simply be wiped away." (Additional reporting by Ankur Banerjee and Tom Westbrook in Singapore, Liang-sa Loh and Roger Tung in Taipei ​and Samuel Shen in Shanghai; Editing by Sharon Singleton and Tomasz Janowski)