Asia recovers some chip losses as falling yields steady Wall Street

• US (Thursday's close): The Dow finished 1.08% higher at 52,177.69, comfortably outpacing the S&P 500 (+0.33%, 7,744.06) and the Nasdaq (+0.08%). Futures are the only live read and they are flat: S&P 500 futures are 0.04% higher and Nasdaq 100 futures 0.02% lower.
• Europe (Thursday's close): The FTSE 100 ended 1.08% higher at 10,840.35, within 1.4% of its 52-week high. The CAC 40 gained 0.78% and the DAX 0.33%, while the Euro Stoxx 50 slipped 0.36%.
• Asia (today): Seoul is leading the rebound. The Kospi is trading 2.47% higher and the Nikkei 1.51% higher. Taiwan closed 0.3% up, the Hang Seng is 0.44% firmer and Shanghai is 0.22% lower.

Investors are worried about how the AI build-out is being financed, and today brought some relief. The sell-off began on Wednesday after a widely shared post about the debt load at CoreWeave, a cloud provider that borrowed heavily to buy Nvidia chips. Its shares fell 15.5% as yields on its bonds jumped, and the selling spread to chipmakers around the world. On Thursday the Kospi fell more than 7%, enough to trigger a circuit breaker. Across Asia, our own count found 2,037 stocks rising against 10,942 falling. Today's bounce followed Nvidia boss Jensen Huang telling Bloomberg that CoreWeave's cost of capital is falling. TSMC's record profit had not been enough to stop the slide, because the fear is about who pays for the chips, not whether there is demand. Even after today's gain, the Kospi is down 10.85% over five days.

On Wall Street, Thursday's gain was a rotation out of tech rather than a broad rally. Health care (+1.86%) and materials (+1.79%) led the S&P sectors, while technology fell 0.65%. The odd part was the bond market. US producer prices rose 1.3% in September against the 0.5% expected, the day after a hotter-than-forecast CPI report. Data like that normally pushes yields up. Instead, the 10-year Treasury yield fell 10.1bp to 5.089%. The likeliest reading is that investors bought bonds as a safe place to park money during the AI scare, but there is no clean explanation. Lower yields help explain why tech recovered from its lows: growth companies' profits lie far in the future, so they are worth more when rates fall.

London did well because it holds few tech stocks, and Thursday's better-than-expected GDP figure helped too. WTI crude is 2.11% lower overnight with no clear catalyst, and energy was the weakest US sector on Thursday (-1.58%).

Stock and bond markets are telling different stories. The VIX, which tracks expected swings in US stocks, eased 0.41 to 16.46. The MOVE index, its bond-market equivalent, jumped 3.46% to 102.49, so the turmoil has moved into rates. US breadth was strong: on our count, 3,993 stocks rose and 1,936 fell. Our consumer cyclical median gained 3.12% while energy fell 1.40%. Europe was weaker beneath its headline indices, with our advance/decline ratio at 0.74. Investors are not fully back in risk-on mode: gold is 0.56% higher at $4,193.50 even with the dollar index 0.13% softer.

No major UK release has been confirmed for this morning. The week's big UK figure came on Thursday: August GDP rose 0.1% on the month, against forecasts for a 0.1% fall, and grew 0.7% over three months against 0.5% expected. Sterling is trading 0.6% higher at $1.3309, adding to its gains since that print.

In Bangkok overnight, Fed Chair Kevin Warsh declined to say whether the Fed would raise rates again or when. Markets took his silence to mean no hike this month and are now betting on December, even after two hot inflation readings. Later today the Bundesbank's Joachim Nagel, the Bank of Canada's Tiff Macklem and the Cleveland Fed's Beth Hammack are due to speak; their exact times are not confirmed. No top-tier US data is scheduled. Further out, the 28 October UK Budget is starting to shape gilt and bank-stock sentiment.

TSMC's third-quarter net profit rose 69% to a record, beating estimates, with high-performance computing chips making up 68% of revenue. Its shares still fell about 2% in Thursday's AI sell-off. In Europe, Ericsson's Stockholm B shares rose 6.8% on 7% organic sales growth, and in London Dunelm gained 7.93% after confirming its annual outlook. Today, US regional banks and Travelers report before the New York open.