European and U.S. stock futures sank after volatile sessions in Asia and Wall Street as investors battled to regain their footing after a chaotic week for markets.
The yen and U.S. bonds surged as traders awaited weekly jobless claims data, which has gained importance after dismal employment numbers caused Monday’s market collapse.
Eurozone’s Stoxx 600 slumped 0.9% after rising 1.5% Wednesday. The German DAX fell 0.6% and the British FTSE 100 fell 1%.
S&P 500 futures fell 0.2%. After giving up 1.7% in morning trading, the index sank 0.8% the day before.
“When you have a volatility shock like this and a degree of unwind in certain positions, you’re very prone to sudden reversals and uneasiness as the adjustment continues,” said Wells Fargo macro strategist Erik Nelson.
“I would be surprised if we just went back to everything being fine.”
Japan’s Nikkei share index rose 0.8% after early losses of 2.5% before falling 0.7%.
Weak U.S. jobs data last week, a sharp Japanese yen gain, and concerns about an AI bubble sent stocks down.
The S&P 500 fell 3% on Monday and is 2.8% lower for the week, but it’s still up 9% for the year.
On Wednesday, technology companies experienced a decline as a result of investor concerns over weak 10-year Treasury auction demand.
YEN BOUNCES
After falling 1.6% on Wednesday, Japan’s yen rallied on Thursday, causing investor anxiety. The dollar fell 0.3% to 146.26 yen.
Since hitting a 38-year low in July, the yen has risen 11% due to government assistance, a surprise Bank of Japan rate hike, and the dollar-weighing U.S. jobs slowdown.
The surge led investors to dramatically unwind carry trades, where they borrowed cheaply in Japan to buy dollars and other currencies to invest in higher-yielding assets, and caused a 12% drop in Japanese stocks on Monday
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