Stoxx600, Fed rate cut, AI bubble, Chinese economy

European stocks fell sharply on Friday as concerns about the artificial intelligence bubble and the global economy shook investor confidence.

By 12:20pm (7:20am ET) in London, pan-European Stocks 600 fell 1.9%, with all major exchanges in the region down significantly.

The region’s STOXX Technology Index fell 3.2%, following widespread selling in big tech stocks on Wall Street the previous day. This comes amid growing concerns about AI ratings by Wall Street tech companies. Nasdaq Composite It fell 2.3% by the closing bell on Thursday. Tech stocks including AI darlings rise on Friday morning Nvidia It fell in pre-market trading.

In Europe, infineon5.7% decrease, SAPa decrease of 4.4%, and BE Semiconductorfell 3.9%, making it one of the worst-performing tech stocks in early afternoon trading.

SAP announced on Friday that it plans to make concessions to resolve an EU antitrust investigation. European lawmakers were investigating the German company’s control of its flagship enterprise resource planning software.

Elsewhere, Danish weight-loss drug maker Novo Nordisk’s stock price fell 2.7% as investors looked ahead to Friday’s special general meeting where shareholders will vote on a board shakeup.

Investor attention is also focused on the global economy.

China’s economic slowdown took hold in October, with data showing fixed asset investment, including the country’s hot real estate sector, contracted in the first 10 months of the year. Meanwhile, retail sales slowed and industrial production growth also slowed.

Comments from Fed officials in recent weeks have led money markets to reconsider the central bank’s chances of cutting interest rates in December. By Friday morning, the market had priced in a 52.1% probability that the Fed would cut rates by 25 basis points at its next meeting. A month ago, the market was pegging the probability of a year-end rate cut at 95%.

Returning to Europe, yields on British government bonds (known as gilts) soared on Friday following reports that the Labor government is reversing its plan to increase income tax as part of its looming autumn budget.

Bond prices and yields move in opposite directions. So a spike in yields means a sale of assets.

Benchmark yield 10 pension The last seen was an 8 basis point increase to 4.52%, down from an earlier spike that saw yields rise by as much as 13 basis points at the longer end of the maturity curve. long term yield 20- and 30 year gold coin Each rose more than 9 basis points.

Meanwhile, the British pound fell as markets reacted to the news. The pound was last seen depreciating against both countries. USD and EURdecreased by more than 0.4% and 0.2%, respectively.

Corporate profits continue to attract attention in Europe, with German insurance companies allianz Among the companies that reported Friday.

Allianz said it achieved record results in the first nine months of the year, supported by double-digit growth in operating profit in the third quarter. Operating profit rose 12.6% to 4.4 billion euros ($5.1 billion) in the three months to September, mainly contributed by the company’s non-life insurance division.

The company said it expects to achieve an operating profit of at least 17 billion euros this year, which is at the high end of its full-year guidance range.

Allianz shares were most recently trading up about 1.8%.

meanwhile, Richemont Shares rose 3.6% after Cartier’s owner reported a 14% increase in second-quarter sales at constant exchange rates, matching previous gains.

The company said sales in China, Hong Kong and Macau returned to growth over the same period, another sign of a broader recovery in the luxury goods sector after weak demand from Chinese consumers caused sales to slump. peer LVMH and burberry The company also announced strong results for the current fiscal year.

Stocks fell overnight in Asia as investors monitored developments on Wall Street and reacted to the China data.

—CNBC’s Elsa Ohlen contributed to this report.