The flight from risk assets accelerated across Asian and European markets following an initial downturn in American equities. Unlike the technology rout observed in October, traders aggressively sought safety in short-dated securities and the greenback over alternative foreign currencies. Meanwhile, solid labor figures showing initial jobless claims falling to 189,000 kept attention firmly fixed on the upcoming non-farm payrolls release.
Key points
Anticipated regulatory scrutiny and data center construction limits following midterm ele…: Anticipated regulatory scrutiny and data center construction limits following midterm election results are heavily pressuring technology valuations.
Growth-oriented currencies like the Australian and New Zealand dollars faced steeper loss…: Growth-oriented currencies like the Australian and New Zealand dollars faced steeper losses than typical defensive assets during the selloff.
Investors shifted away from previous selloff behaviors by channeling funds directly into…: Investors shifted away from previous selloff behaviors by channeling funds directly into Treasuries and short-dated paper.
Sources checked by our analysis pipeline: 1
LONDON, Nov 6 : The dollar gained against other major currencies on Friday, drawing support from safe-haven demand as the selloff in AI stocks spread worldwide and the markets awaited a US payrolls report.
Asia's tech-heavy markets fell heavily on Friday, and selling broadened in Europe.
The previous day, US stocks declined by the most since April 2025 as investors anticipated that huge Democrat gains in the US midterm elections this week would increase scrutiny of the AI industry and limit data centre construction.
But while the dollar weakened in a previous tech stocks selloff in October, that was not the case on Friday. Analysts said the turbulence instead was pushing investors into US treasuries and short-dated securities.
"It seems that global investors are more than happy to leave their cash in dollars for the time being. In other words, we are seeing a rotation into cash and not out of the dollar," said Chris Turner, global head of markets at ING.
"Helping that story is the return to more familiar correlations, where US Treasuries are now performing their safe…
Democratic victories in midterm elections coupled with dozens of restrictive local ballot measures have raised investor anxiety over the regulatory future of artificial intelligence infrastructure. Mounting municipal resistance and political realignments threaten to severely delay high-capital computing facilities, compounding existing concerns over corporate earnings and hyperscaler cash flow. This sudden friction suggests the massive buildout phase faces an uphill battle that could compress the sector's long-ter…
Investors are pivoting away from non-yielding commodities in favor of rising Treasury yields that provide guaranteed returns above inflation. This capital rotation has pushed bullion into a notable retreat despite active geopolitical conflict. Elevated energy costs driven by international instability continue to feed upward pressure on broader interest rates.
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