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Stock markets are “on the verge” of a correction as volatile trading wiped $500bn (£384bn) off the value of artificial intelligence (AI) chip makers.
Jim Reid, an analyst at Deutsche Bank, said that this week the “market narrative saw a discernible shift, with a growing chorus discussing whether we might be on the verge of an equity correction”.
A market correction is usually defined as a fall of more than 10pc from a recent peak.
Mr Reid warned that markets have became too heavily “concentrated” towards Big Tech stocks.
Investors are said to be “buying the dip” on Wednesday afternoon after a sell-off yesterday that pushed Wall Street’s Nasdaq index by 2pc and the S&P 500 down by 1.2pc.
Overnight, tech-heavy stock markets in Japan and South Korea suffered falls of more than 2pc each following a heavy sell-off on Wall Street.
At one point, Tokyo’s Nikkei was down nearly 7pc from Tuesday’s record highs after key figures appeared to question the valuations of equity markets.
Nvidia supplier Advantest dropped as much as 10.2pc, while Taiwan Semiconductor Manufacturing Co (TSMC) fell 3pc. The moves helped wipe around $500bn from two key indexes tracking semiconductor stocks.
Palantir, the US artificial intelligence giant, sank nearly 8pc on Tuesday after its projections in its third quarter results failed to impress investors.
Mr Reid’s warning came after it emerged that Michael Burry, the investor depicted in the film The Big Short, had placed heavy positions against Palantir and Nvidia.
On Wall Street, the S&P 500 is up 0.5pc, the Nasdaq is up 0.8pc and the Dow Jones is up 0.1pc. In London, the FTSE 100 has gained 0.7pc and the FTSE 250 is up 0.6pc.
Thanks for joining us on this live blog.
That’s all for now here, but you can read all the latest business stories and comment from The Telegraph here.
Investors will continue buying US tech giant despite warnings of a market correction, a leading stockbroker has said.
Danni Hewson, head of financial analysis at AJ Bell, said: “The US stock market opened in bounce-back mode after Tuesday’s stumble, partly buoyed by a robust jobs report …
“Of course, US stocks still trade on high valuations by historic standards, but momentum seems to be behind them, and that can be a powerful force.
“Bubbles don’t tend to go pop of their own free will – there is usually a catalyst that sparks a rush for the rubber slides.
“On that front the US economy still looks like it’s growing at a reasonable rate and the Fed is in the middle of a rate-cutting cycle.
“Then again, sometimes the match that lights the blue touchpaper appears out of nowhere. For now though, buy the dip continues to be a winning trade, and that success will likely only attract more investors to the strategy.”
The FTSE 100 closed up 0.6pc, while the FTSE 250 gained 0.5p in a positive day for European and US stock markets.
Germany’s Dax gained 0.4pc and France’s Cac 40 added 0.1pc.
Stock indexes gained on both sides of the Atlantic as technology-related shares rebounded and new US employment figures were stronger than expected.
BMW shares jumped 6.9pc today after reported rising profitability in the last quarter. This came despite slowing Chinese sales and the impact of tariffs, offering some rare good news for Germany’s beleaguered auto sector.
It came just days after domestic rival Volkswagen reported its first quarterly loss since the pandemic.
Oliver Zipse, the BMW chief, said the company was proving itself “resilient” despite numerous difficulties.
These included “a shifting geopolitical framework with trade impacts such as tariffs, as well as a rapidly evolving market in China,” he said.
In the July-September period, BMW posted an operating profit margin in its auto unit, closely watched by investors, of 5.2pc, compared to 2.3pc in the same period last year.
However, tariff costs in the United States and the European Union – BMW exports electric vehicles made in China that are subject to EU levies – were weighing on profits, it warned.
BMW has generally sounded more upbeat about riding out US President Donald Trump’s tariff storm than other German carmakers as it has a sizeable American footprint, with its biggest plant worldwide in South Carolina.
World trade has remained “fairly resilient” despite Donald Trump’s trade war other countries mop up Chinese goods, Capital Economics has said.
Ariane Curtis, senior global economist, said: “Global goods trade has remained fairly resilient so far this year. Tariffs have not yet had the sharp negative impact on global trade that many – including the IMF and WTO – had been anticipating earlier this year.
“That’s partly due to the fact that US importers have shifted away from some high-tariffed goods, meaning the actual US tariff rate had only risen to about 11pc in August, which is far lower than the 17pc implied at the time based on 2024 import shares.”
She added: “The available data suggest that Asian exports have continued to prove resilient in the wake of US tariffs.
“Exports from Japan, Korea and Singapore rose sharply in September. China’s exports picked up slightly as well, as the fall in direct exports to the US continued to be offset by a pickup in exports to other markets, particularly Latin America, Africa and the rest of Asia.”
Money markets cut their predictions for a US interest rate cut next month after private sector employment rose faster than expected.
Private-sector employment grew by 42,000 in October, according to ADP, compared to 30,000 that had been expected.
The market currently believes there is a 63pc change of a rate cut, compared to 69pc yesterday.
Eric Teal, chief investment officer of Comerica Wealth Management said that as Donald Trump’s immigration policies take effect “we expect that the job market will improve for entry-level workers and service industries; however, this might bring with it wage and inflationary pressures that bear close monitoring.”
Stocks rose on Wall Street Wednesday as more US companies publish their quarterly results and an employment update shed some light on the US economy.
The S&P 500 is up 0.3pc, the Nasdaq is up 0.5pc and the Dow Jones is flat.
The gains mark a reversal from Tuesday’s dip as big technology stocks once again lead the broader market.
Several big industrial companies also helped lift the market, while an update from McDonald’s lifted shares 2.2pc.
A monthly report from ADP showed that private payrolls rose more than expected in October. The report offers a partial glimpse into the job market, which has been generally weakening and raising broader concerns about economic growth.
Treasury yields rose in the bond market. The yield on the 10-year Treasury rose to 4.14pc from 4.09pc late Tuesday.
Super Micro Computer, the US manufacturer of servers, plunged 8pc today after releasing disappointing quarterly results.
The California-based firm revealed that its gross margin had fallen to 9.3pc from 13.1pc a year ago, and that sales had dropped to $5bn from $5.9bn a year earlier.
However, Charles Liang, its chief executive, said that nearly $1.5bn in revenue shifted from the quarter to the next due to last-minute configuration upgrades by a high-volume customer
“Competition remains intense,” he said, and “some large-scale use has pressured margins in the near term.”
Apple and Amazon shares slumped further as Big Tech companies remained under pressure over fears of an AI bubble.
The two members of the so-called Magnificent Seven group of tech stocks were both down around 1pc.
Semiconductor manufacturer AMD, which looks to become a major player in AI chips, was down 2.7pc at the start of trading despite better-than-expected third-quarter results.
The tech decline comes despite stocks steadying on Wall Street from Tuesday’s sell-off.
Briefing.com analyst Patrick O’Hare said: “If AMD can fight back, chances are other growth stocks will follow.”
US stocks rose in early trading as investors used the sharp decline this week as an opportunity to buy shares at cheaper prices.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were up 0.3pc, 0.4pc and 0.5pc, respectively.
The FTSE 100 was 0.4pc higher, ahead of European rivals, owing to its lack of exposure to tech stocks.
Robert Edwards at Edwards Asset Management said: “For investors with cash on the sidelines, the recent market pull-back seems like a good time to buy, especially for investors with a longer time horizon.
“Earnings are crushing it and growing faster than revenues and that often leads to multiple expansion.”
Donald Trump insisted the US stock market would hit more record highs despite the recent concerns about AI.
He said federal government shutdown had contributed to the recent downturn that saw the Nasdaq Composite slump by more than 2pc on Tuesday.
“The stock market, as of Friday, has hit many record highs during the last nine months,” he told Republicans at a breakfast meeting in the White House.
“It will again, this is just the beginning, because when these plants that are being built right now start opening up, we’ve never had anything like this. There’s a boom. There’s a construction boom right now.”
Wall Street’s main indexes steadied after the sharp sell-off suffered on Tuesday over concerns about AI stock valuations.
The Dow Jones Industrial Average climbed 0.1pc to 47,134.47 while the S&P 500 was flat at 6,771.92.
The tech-heavy Nasdaq Composite slipped 0.1pc to 23,322.05.
Donald Trump partly blamed the longest US government shutdown in history for the recent decline in stocks.
The US president told a breakfast meeting with Republicans at the White House: “We must get the government back open soon.”
He added: “It’s affecting the stock market now a little bit.”
Mr Trump spoke a day after the tech-heavy Nasdaq Composite plunged 2pc amid concerns that valuations of AI-linked companies have risen too high.
The federal shutdown today entered its 36th day, making it the longest suspension in history.
Private sector employers in the US added more jobs than expected last month in closely watched data that could influence the Federal Reserve’s next interest rate decision.
Payrolls grew by 42,000 in October, according to the ADP Employment Report, which was better than the 30,000 expected.
The figures indicate employment has rebounded after two months of contraction, while it showed pay growth was unchanged at 4.5pc for job-stayers and 6.7pc for job-changers.
The data has taken on greater significant as official US employment figures are not available while the US government shutdown remains in force.
ADP chief economist Nela Richardson said: “Private employers added jobs in October for the first time since July, but hiring was modest relative to what we reported earlier this year.
“Meanwhile, pay growth has been largely flat for more than a year, indicating that shifts in supply and demand are balanced.”
The boss of Nvidia insisted the artificial intelligence sector is “long away” from a crash similar to the one portrayed in the film The Big Short.
Jensen Huang defended his sector as it emerged a notorious investor had placed a major bet against the world’s first $5 trillion (£3.8trn) company.
Michael Burry, who bet on a US housing market crash in the run-up to the 2007 crisis, has wagered $1.1bn (£840m) on falls in shares of chip-maker Nvidia and software company Palantir.
Mr Huang said his company had enjoyed “great returns” from AI, as he spoke outside Downing Street following a roundtable with the Government and other industry figures.
He said AI is the first technology that requires “infrastructure to be built”.
“When something is profitable, the suppliers want to make more of it, and that’s the reason the infrastructure build out is accelerating,” he told Sky News.
Pushed on whether he was worried about a situation like The Big Short, Mr Huang added: “We are long, long away from that.”
Norway’s has frozen the ethical investing rules for its $2.1tn (£1.6tn) sovereign wealth fund so it can continue investing in big tech companies with ties to the Israeli government.
Jens Stoltenberg, the nation’s finance minister, said there was a risk that its ethics council could have called for it to “withdraw from some of the largest companies in the world”, including Amazon, Microsoft and Google, which would “undermine” the fund.
The sovereign fund, which manages the country’s vast oil wealth, had previously divested from 11 Israeli companies on ethical grounds.
The Nasdaq and S&P 500 were lower in premarket trading as investors retreated from AI-linked stocks for a second day.
However, Wall Street was on track for a less severe loss at the opening bell compared with Tuesday, when the Nasdaq tumbled 2oc to post its biggest one-day loss in nearly a month.
US stocks were trading at all-time highs in late October before warnings of a market pull-back by the bosses of Goldman Sachs and Morgan Stanley.
Herald Van der Linde, an analyst at HSBC, said: “The problem with high valuations is that it’s like blue sky. The moment there’s one small black cloud, it is not a blue sky anymore.
“So if you have very high valuations, small news, shifts in sentiment can actually cause markets to come down a lot.”
The benchmark S&P 500 has recently traded at 23.3 times forward earnings, the highest since the start of the century and well above its 20-year average of 16, according to LSEG data.
Shares of Advanced Micro Devices, which have more than doubled this year, dipped 4.9pc premarket. Super Micro Computer, also an AI player, slumped 9pc after the server maker posted quarterly profit and revenue below Wall Street estimates.
Shares of other big chip companies Nvidia, Broadcom and Intel also fell.
The Dow Jones Industrial Average was on track to open flat, the S&P 500 was poised to open down 0.2pc and the Nasdaq 100 was lower by 0.4pc.
Stocks have slumped as the US government shutdown became the longest in history today.
The federal shutdown has entered its 36th day, breaking a record set in 2019 during President Donald Trump’s first term in office.
Analysts estimate that every week that passes costs the US economy between $10bn and $30bn (£7.7bn to £23bn), with many government key workers being forced to turn up without pay.
The Trump administration has tried to sack thousands of federal workers during the shutdown. It has also suggested that not all of the estimated 650,000 furloughed workers should be paid retrospectively.
Democrats have blocked spending legislation in the Republican-controlled Congress, saying that any funding package must also expand Covid pandemic-era healthcare subsidies due to expire at the end of December. Republicans say that issue should be dealt with separately.
The second-longest shutdown on record started on December 22, 2018, when Democrats in Congress refused to back a spending bill that included Trump’s $5.7bn request for fencing on the US-Mexico border. The two sides eventually approved a spending bill without border wall money that Mr Trump signed into law on January 25, 2019, ending the shutdown.
Grant Slade, UK economist at Morningstar, said he expects the Bank of England to keep interest rates on hold at 4pc tomorrow before making a cut in December.
He said: “Still, we think the decision will prove a closer call for the Monetary Policy Committee, than it was during the bank’s September meeting.
“Then, the majority of Monetary Policy Committee members felt that risks to a further up-tick in the inflation rate outweighed the risk of demand weakening in the face of still high interest rates.
“However, recently released labour market data points to a shift in the balance of these risks.
“Indeed, a further up-tick in the unemployment rate and weakening payrolled employee data point to a labour market which continues to soften.
“At the same time, fiscal policy measures are expected to become increasingly contractionary. Government spending is set to slow in the new year, while tax rises are widely anticipated in the upcoming Autumn Budget later this month.
“For these reasons, we see scope for further monetary easing. However, we anticipate that the Monetary Policy Committee will maintain its current stance this month as it awaits further details from the Autumn Budget and additional economic data to confirm that enough slack exists to exert downward pressure on inflation.”
Traders have reduced bets on the Bank of England cutting interest rates tomorrow after data showed Britain’s services sector grew at a faster pace than expected last month.
Money markets indicate there is a 28pc probability of policymakers lowering borrowing costs on Thursday, down from 31pc on Tuesday.
It comes as new figures showed growth in the UK services sector accelerated last month as bosses said they were the most optimistic for a year.
Businesses in the sector, which includes retail, hospitality and financial services, also reported that cost inflation waned to its weakest level for 11 months.
The S&P Global UK services PMI survey scored a reading of 52.3 in October, up from initial estimates of 51.1.
Interest rates were kept on hold at 4pc by the Bank of England in September. Traders bet there is a 71pc chance of another rate cut happening by the end of this year.
US stocks were mixed in premarket trading after China said it would extend a suspension of additional tariffs on US goods for one year.
The Dow Jones Industrial Average was flat while the S&P 500 and Nasdaq were down 0.2pc to 0.3pc as Beijing formalised the agreement reached in talks between presidents Xi Jinping and Donald Trump last week.
The two leaders held talks in South Korea at the end of October that effectively prolonged a delicate truce for a year, after several rounds of trade negotiations in recent months.
A statement published Wednesday on the Ministry of Finance website, citing Beijing’s State Council, said that “for one year the 24 percent tariff on US goods will continue to be suspended, (and) a 10 percent tariff on US goods will remain”.
The statement said the pause follows “the consensus reached in the China-US economic and trade consultations” and would be effective from November 10.
Mr Trump on Tuesday formalised an agreement that Washington would cut its additional tariffs on Chinese imports from 20pc to 10pc, also effective from November 10.
House prices are set to flatline across Britain until 2028 as high interest rates and tax rise fears dampen buyer demand, Savills has warned.
Average prices adjusted for inflation will not return to growth until 2028, the estate agent said, bringing an end to stagnating values for the first time since 2022 in the wake of the pandemic.
Savills said the housing market continues to bear the brunt of weaker buyer confidence and concerns about the economy and taxation, slowing down demand into early 2026.
Bosses in the major driving force of Britain’s economy said they were the most upbeat about the next 12 months since October last year, a closely watched survey showed.
Business activity in the services sector expanded for the sixth consecutive month in October, according to the S&P Global UK Services PMI.
Its reading of 52.3 for October was better than an earlier “flash” reading of 51.1. A score above 50 indicates the sector is expanding, while below shows contraction.
Tim Moore, economics director at S&P Global, said: “The latest survey offered some positive signals for the UK service economy, with output growth stronger than the earlier ‘flash’ estimate for October, and therefore confirming a notable improvement from September’s five-month low.
“Similarly, the rate of new business expansion gained momentum, with the latest upturn among the strongest seen over the past year.”
The value of the pound has recovered some ground after a double blow from Rachel Reeves’s tax warning and a flight to safety from investors.
Sterling was up 0.2pc to $1.305 after dropping as low as $1.301 overnight as investors dumped stocks and sought out the safe haven dollar.
The pound had already been hit on Tuesday by the Chancellor’s suggestion she would raise taxes in the Budget later this month to shore up the public finances.
It continued to be pushed downward by the sell-off in stocks that has gripped global indexes. Sterling was last up 0.1pc against the euro, which is worth just over 88p.
Stephen Innes of SPI Asset Management said: “Markets this week feel like a high-wire act above a canyon of complacency.
“Equity valuations have climbed so far out over the safety net that even a tremor in sentiment sends traders scrambling for the dollar’s embrace.
“There’s no single villain in this drawdown—just the collective recognition that prices were hovering near the stratosphere.”
European shares hit a two-week low as investors sold stocks over concerns that valuations have become too high.
The continent-wide Stoxx 600 fell 0.3pc to 568.94 as technology stocks sank as much as 1.8pc.
The Cac 40 in Paris was down 0.2pc while the Dax in Frankfurt declined by 0.6pc.
Novo Nordisk shares fell as much as 4.8pc but were last down 0.2pc in choppy trading. The Wegovy maker lowered its full-year profit forecast in an early blow to the Danish drugmaker’s new chief executive amid a deep restructuring drive.
Ambu slumped 12pc after the Danish endoscopy solutions maker reported quarterly results below consensus Vestas reported third-quarter operating profit above expectations, sending shares of the wind turbine maker up 10pc.
Bitcoin dipped below $100,000 for the first time since June overnight as a $45bn (£34.5bn) exodus from the world’s largest cryptocurrency continued.
The digital token recovered slightly this morning to just over $101,000 but it remains down around 20pc from its record high above $126,000 last month.
Markus Thielen, head of 10x Research, said long-time holders of Bitcoin had offloaded around $45bn worth of the coin over the last month.
CoinGlass said around $2bn in crypto positions were liquidated over the past 24 hours.
The FTSE 100 fell at the open but was shielded from the worst of the sell-off that has gripped global peers.
The UK’s flagship stock index was down just 0.3pc to 9,681.89 as its low exposure to tech protected it from the sharp downturn this week.
The domestically focused FTSE 250 was down 0.7pc to 21,948.58 amid concerns that Chancellor Rachel Reeves will dampen growth with an income tax rise in the Budget later this month.
One of OpenAI’s biggest investors has been rocked by a rout of stocks exposed to the artificial intelligence (AI) boom as investors grow nervous over sky-high valuations.
SoftBank, the Japanese technology business, is set to become the ChatGPT developer’s biggest financial backer and has emerged as something of a proxy for the AI infrastructure boom thanks to its sprawling investments.
It has pledged to invest $30bn in OpenAI and last week approved a tranche of funding worth $22bn. It is also a substantial investor in Nvidia, Oracle and TSMC, and has promised to develop “Project Stargate” – a global data centre megaproject – with OpenAI.
Its shares had climbed almost 190pc this year on the AI rally. But overnight, SoftBank shares slid 10pc – and are down 16pc so far this week – as investors sold out amid concerns about a correction in tech stocks.
The shock drop came even as SoftBank chief executive Masayoshi Son and OpenAI’s Sam Altman unveiled a new partnership this morning which they claimed would transform how businesses use AI.
“Together with OpenAI, we’re driving the AI revolution to the next stage,” Son said.
Stocks have slumped after markets became too heavily “concentrated” towards Big Tech stocks, analysts have warned.
The so-called Magnificent Seven group of stocks, which includes Nvidia, Microsoft and Tesla, has climbed around 45pc in the last year amid the excitement around the potential of artificial intelligence.
However, the S&P 500 has risen just 5pc over the same period when stocks on the index are equal weighted.
Jim Reid, an analyst at Deutsche Bank, said: “Whilst the moves were only one day’s sell-off, the market narrative saw a discernible shift, with a growing chorus discussing whether we might be on the verge of an equity correction.
“That speculation has gathered pace over the last month in particular, mainly because the Magnificent Seven has diverged from the rest of the S&P 500, which has revived questions about how concentrated this equity market now is.”
The UK’s stock market is on track to fall at the open amid the global sell-off in stocks.
The FTSE 100 was down 0.2pc in premarket trading, declining much less than other indexes due to its low exposure to tech stocks.
Meanwhile, the Cac 40 in France and Dax in Germany were on track to open lower by 0.6pc.
Marks & Spencer shares will be under scrutiny at the open after it revealed its half-year profits have more than halved following a major cyber attack earlier this year.
The retail giant reported underlying pre-tax profits of £184.1m for the six months to September 27, down 55.4pc from £413.1m a year earlier.
On a reported basis, profits were almost wiped out, plunging to £3.4m from £391.9m a year ago.
M&S said the cost of the attack is set to total around £136m, including about another £34m in the final six months, but it was able to recover £100m in its first half through an insurance payout for the hack.
SoftBank Group, one of the world’s biggest tech sector investors, was one of the worst hit companies by the AI sell-off.
The majority backer of Cambridge microchip designer Arm dived as much as 14.3pc as investors questioned how the downturn would affect investment in the sector.
SoftBank is one of the major backers of OpenAI, the maker of ChatGPT, and is considered a proxy for the health of the sector.
Fawad Razaqzada, an analyst at Forex.com, said: “One concern here is that the leadership has become worryingly narrow, with a handful of mega-cap tech names doing all the heavy lifting, leaving the broader market vulnerable to any wobble in the AI narrative.”
No single catalyst has been blamed for the tech stock sell-off, which has reached far and wide.
Despite strong earnings releases in recent quarters, traders have started questioning the wisdom of chasing ever-higher prices, with cash mostly funnelled into a handful of big-name companies.
Palantir, which has climbed 400pc over the last year, fell nearly 8pc on Tuesday even though its third quarter results beat expectations.
Matt Maley, chief market strategist at Miller Tabak, said the stock market was “ripe for some sort of material pull-back over the near-term”.
Charu Chanana, an analyst at Saxo Markets in Singapore, said: “A pull-back was overdue after strong and steady gains in tech.
“A firmer dollar, weaker crypto markets, and valuation concerns in US Big Tech have all combined to pressure risk sentiment.”
Thanks for joining me. The global rout in stock markets deepened as more than $500bn (£384bn) was wiped off the value of artificial intelligence (AI) chip makers.
South Korean shares sank by as much as 6.2pc while Japan’s benchmark stock index tumbled more than 4pc at one point. MSCI’s main index of Asia-Pacific shares outside Japan was down as much as 2.3pc, which was the most since Donald Trump’s “liberation day” tariff onslaught in April.
Nvidia supplier Advantest dropped as much as 10pc, while Taiwan Semiconductor Manufacturing Co (TSMC) fell more than 3pc. The moves helped wipe around $500bn from two key indexes tracking semiconductor stocks.
Stocks retreated from record highs after key figures on Wall Street appeared to question the valuations of equity markets.
The bosses of Goldman Sachs and Morgan Stanley both suggested a correction was imminent over the next one to two years. Meanwhile it emerged that Michael Burry, the investor depicted in The Big Short who bet against the housing market ahead of the global financial crisis, had placed heavy positions against Palantir and Nvidia.
Palantir sank nearly 8pc on Tuesday after its projections in its third quarter results failed to impress investors.
Chris Weston, head of research at Pepperstone Group, said: “It’s a sea of red across broad markets, and one that offers a gloomy and damp portrayal of risk.
“We need to remain open-minded to the possibility that this could still further build. Simplistically, there aren’t many reasons to buy here.” Here is what you need to know.
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Tokyo’s benchmark Nikkei 225 index dipped more than 4pc after a retreat on Wall Street spurred by selling of Big Tech shares.
Shares in energy and tech giant SoftBank Group sank 9.8pc on jitters over its investments in artificial intelligence. Computer chip maker Tokyo Electron dropped 4.1pc, while stock in Advantest, a maker of semiconductor testing equipment, lost 7.2pc.
South Korea’s Kospi declined as much as 6.2pc as Samsung Electronics shed 4.9pc. SK Hynix, which had logged major gains thanks to plans to develop artificial intelligence with chip maker Nvidia, lost 2.9pc.
Chinese markets were less affected. The Shanghai Composite index recovered from modest earlier losses to edge 0.2pc higher, to 3,967.53. Hong Kong’s Hang Seng declined 0.3pc to 25,888.16.
US stocks slumped on Tuesday over fears of an artificial intelligence bubble. The US benchmark S&P 500 closed down by 1.2pc. The tech-heavy Nasdaq Composite fell by 2pc while the Dow Jones Industrial Average was down by 0.5pc.
Cryptocurrencies, which typically move in lockstep with tech stocks, plunged, with the price of Bitcoin briefly falling below $100,000 for the first time since June. It is down more than 20pc since its record peak in October.
Weaknesses in the stock market drove investors to buy government bonds. Treasury yields dipped by a few basis points. The rate on 10-year Treasuries was 4.08pc.
Higher demand for US debt pushed up the value of the dollar to its strongest level since May.
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