Global markets slide as tech sell-off and risk-off sentiment hit equities

Wall Street closed sharply lower on Thursday as a tech-led pullback extended into a third session, with the S&P 500 down 1%, the Nasdaq sliding 1.10% and the Dow also falling 1%, as investors continued to trim exposure to crowded mega-cap positions, dragging consumer discretionary and communication services to the bottom of the sector leaderboard. Sentiment was weighed down by Alphabet, which flagged a sharp increase in AI-related capital spending and guided 2026 capex toward the upper end of a $175–$185 billion range, reviving concerns over the timing of earnings payback, while weakness in semiconductors added to the pressure after Qualcomm dropped 8.40% on a cautious outlook tied to softer memory demand and inventory constraints. The risk-off tone was reinforced by signs of a cooling labour market, with weekly initial jobless claims rising to 231 000 and corporate layoff announcements jumping to 108 000 in January, the highest January total since 2009.

European equities ended Thursday decisively lower as weak earnings and a less accommodative policy backdrop weighed on sentiment, with the Eurozone STOXX 50 down 0.80% and the broader STOXX 600 falling 1.10%. Central bank messaging added to the pressure after the ECB left rates unchanged, but President Lagarde struck a hawkish tone, playing down recent disinflation and concerns around euro strength, tempering expectations for rate cuts this year, while the Bank of England also held rates despite a growing number of MPC members voting in favour of easing. Earnings disappointment drove much of the selling, with Shell sliding 3.50% after missing profit estimates amid lower crude prices, BBVA tumbling 8.80% on results that fell short of expectations, Maersk dropping 3.50% after warning of weaker earnings in 2026, and Rheinmetall sinking 6.50% after cutting guidance, partially offset by gains in BNP Paribas, which rose 1.50% after lifting its shareholder return outlook, and ArcelorMittal, which edged higher on stronger-than-expected fourth-quarter profits.

Asian markets also came under pressure on Thursday, with Hong Kong equities sliding 1.30% as broad-based selling reversed the previous session’s gains, led by declines in technology, financial and consumer stocks. Sentiment weakened after Wall Street closed mostly lower overnight amid an extended tech sell-off and softer-than-expected US January employment data, while losses were compounded by a pullback in mainland China, reviving concerns that economic momentum is fading as weakness in manufacturing and construction persists. The Shanghai Composite fell 0.64% and the Shenzhen Component dropped 1.44%, snapping a two-day rally, as a global rout in technology and metals stocks weighed on risk appetite and prompted investors to steer clear of tech names amid concerns over stretched valuations, heavy AI-related spending and potential disruption to traditional software business models.

South African markets were not spared from the global slump, with the local bourse dragged lower by softer commodity prices and a risk-off tone across emerging markets. The FTSE/JSE Top 40 Index fell amid broad-based losses in resource and mining stocks, while the rand slipped past R16.16/$ as investors shied away from riskier assets. Domestic data offered little relief, with January PMI figures showing business activity stabilising after prior contraction, though demand conditions remained fragile. On the corporate front, ArcelorMittal narrowed its full-year loss following cost-cutting measures and operational restructuring, but the outlook remained challenged by subdued steel demand and ongoing macro headwinds.

In commodities, gold prices fell sharply in a broader market sell-off, as an advance in the dollar to a near two-week high and signs of easing US-China trade tension added pressure on precious metals. Spot gold was down 1.70% at $4 876.12/oz, retreating from a near one-week high hit earlier in the session. The dollar rose to a near two-week high on Thursday, making greenback-priced gold more expensive for other currency holders.