A volatile week behind, technology sector disappointments heavily punished
Summary
- Last week, European stock markets rose while the US markets saw declines, with the Nasdaq falling by 2.0% and the S&P 500 by 0.6%, driven by significant disappointments in the technology sector, such as Intel's 29% share drop.
- Credit risk spreads for technology companies increased, highlighting investor demands for AI investments to yield earnings, while traditional safe havens like gold and US government bonds underperformed.
- The US economy showed strong growth with a 3.4% GDP increase in the third quarter, but PCE inflation rose to 3.6%, and European consumer confidence weakened, notably in France.
- The Bank of Canada raised its policy rate by 0.25 percentage points, while the Fed, ECB, and Bank of Japan maintained their rates, with expectations of rate hikes in December.
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Automatic translation: Originally published in Finnish 02/11/2026, 06:05 GMT. Give feedback here.
Last week was a mixed week on the European and US stock markets. Helsinki and wider Europe rose, but in the US, the Nasdaq fell by 2.0% and the S&P 500 by 0.6% for the week. Cracks appeared in the tech sector's shield. Disappointments in earnings were heavily punished: for instance, Intel's share fell by 29% on Friday.
| Indexes | closing | 1-week change | YTD | |
| OMX Helsinki | 12939,6 | 0,3 % | 4,2 % | |
| Eurostoxx 600 | 646,8 | 1,7 % | 9,2 % | |
| S&P 500 | 7580,1 | -0,6 % | 10,7 % | |
The credit risk spreads of technology companies continued to increase, although there were large differences between companies. Investors are now demanding proof that massive investments in AI will turn into earnings. Traditional safe havens did not work last week either. The price of gold fell to this year's lows at USD 3,885 per ounce, and the US 10-year yield fell only slightly during the week, to 4.93%. The week's data confirmed that Japan and South Korea are buying US government bonds less than before. As I wrote in October, Asian savings are now flowing into AI stocks instead of government bonds, which shifts risks in the fixed-income market to private investors. The price of oil rose to a six-month high as the markets fear that strikes against Iran will continue after Tuesday's midterm elections.
The US economy is still in strong shape. GDP grew by 3.4% in the third quarter, the fastest pace in a year, and the Conference Board's consumer confidence index rose to 91.7. However, PCE inflation, which is closely monitored by the Fed, simultaneously accelerated to 3.6%. In Europe, French consumer confidence fell to its lowest level since 2013. China's industrial profits and South Korea's GDP once again served as a reminder of how important electronics and semiconductors are to global growth.
The Bank of Canada raised its policy rate by 0.25 percentage points last week, but the Fed, the ECB, and the Bank of Japan kept their interest rates unchanged. The markets expect all three to raise rates again in December. This week, the market focus is on the US midterm elections, more on which in the next macro commentary.
