Premarket: Tech tailspin whacks world stocks, yen roars to 2-½-month peak

Stock markets were locked in a multitrillion-dollar tailspin on Thursday as a slump in global tech stocks sent investors fleeing to traditional safe havens like bonds, the yen and Swiss franc.

The selloff in stocks saw investors ramp up bets on rate cuts globally, with futures implying a 100-per-cent chance of a Federal Reserve easing in September. A spike in market volatility fuelled a vicious squeeze on carry trades which saw the U.S. dollar sink another 0.7 per cent to 152.78 yen on Thursday.

On Wall Street, the Nasdaq had lost almost 4 per cent as lacklustre Alphabet and Tesla earnings undermined investor confidence in the already lofty valuations of the “Magnificent Seven” stocks. He also pointed to weakening car sales in the U.S., Europe and Japan, and China’s rates moves this week as a clear sign of softening global consumer demand.The other big mover was the safe-haven yen, up over 1 per cent to the strongest level in 2-½ months. It surged overnight, with the upward momentum intact ahead of the Bank of Japan’s meeting next week where policymakers will debate whether or not to raise interest rates.

“The rate cut expectations are getting very elevated the same way as they were last year,” said Andrew Lilley, chief rates strategist at Barreyjoey in Sydney.

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