Meta Capex Warning Sparks Biggest Treasury Rally Since SVB

Summary

Meta shares slid sharply after it flagged needing hundreds of billions for capex and a new non-voting share class, sparking a flight to safety. US 10-year yields dived in their biggest daily drop since the 2023 SVB collapse, while the yen and Swiss franc climbed. CoreWeave lost another tenth of its value to lows last seen in May 2025. Brent topped $113 amid reports the White House is weighing fresh attacks on Iran after the midterms.

Equities

The FTSE 100 fell 0.5% to 10,699.33 on Thursday as banks and miners weighed. The FTSE 250 dropped 0.9%, its steepest one-day fall since 1 October.

Rentokil Initial jumped 8.6% on Thursday to top the FTSE 100 after reporting higher third-quarter organic revenue growth and a $200m share buyback. London Stock Exchange Group rose 4.3% after raising its 2026 revenue outlook and agreeing to buy financial data firm Octus for about $3.54bn.

Barclays fell 2.3% on Thursday after missing third-quarter profit forecasts and announcing plans to cut about 5,000 jobs, with the banking index falling to its lowest level since June.

Antofagasta lost 6.5%, Anglo American fell 5.5% and Rio Tinto dropped 3.4% on Thursday as gold and copper prices slipped.

Unilever rose 3.1%, GSK gained 2.6% and AstraZeneca added 2.5% on Thursday, while energy stocks led the gainers as Brent crude climbed above $111 a barrel, its highest level since May.

Sainsbury’s fell 2.1% on Thursday after second-quarter sales growth slowed, and IHG slipped 2.7% despite beating quarterly room revenue forecasts.

The Nasdaq fell 2.60% to 26,008.86 on Thursday, its steepest daily drop since early June, and the S&P 500 lost 1.21% to 7,663.43. The Dow Jones Industrial Average edged up 0.02% to 52,867.98.

The Philadelphia semiconductor index plunged 6.7% on Thursday, its biggest one-day fall since 23 June, leaving it more than 26% below its record close. Intel, AMD, Sandisk and Marvell each fell more than 8%.

Meta slid 7% on Thursday despite beating forecasts, after posting its first cash outflow in more than a decade because of AI spending and announcing plans to raise capital through a two-for-one split issuing non-voting shares. Tesla fell 3.1% even after unexpectedly posting positive free cash flow and cutting its 2026 capital spending plans.

Spotify rose 11.1% on Thursday after forecasting fourth-quarter profit above estimates, while Blackstone gained 8.4% after saying wider credit spreads on AI-related debt could offer higher returns. Lockheed Martin climbed 7% after raising its annual sales and profit forecast, and Procter & Gamble rose 5.6% after beating estimates despite warning of rising cost pressures.

Forex & Commodities

The US dollar was up early this morning at 101.6 against a basket of currencies, after falling to 101.4 on Thursday, its lowest level since the start of the month. Against the yen, the dollar fell as low as 156.1 yen early this morning, before recovering to 156.9 by midday in Asia. The yen is heading for its biggest weekly gain since early September as concerns about AI spending lifted demand for safe-haven assets.

The euro was flat early this morning at 1.121 dollars, and the Swiss franc was steady at 0.8211 per dollar. Against the Canadian dollar, the US dollar fell below 1.400 Canadian dollars to its weakest level in a month. The Australian dollar was unchanged at 0.7015 US dollars, while the New Zealand dollar was up at 0.5695 US dollars.

Japan's annual core consumer inflation rose above the Bank of Japan's 2% target in September for the first time in nine months. Economists widely expect the BoJ to hold rates next Friday before raising them by a quarter point in December. The US 10-year Treasury yield stayed near a one-month low at 4.967% early this morning, after falling on Thursday when shares sold off on renewed AI concerns.

Spot gold slipped 0.1% to 4,021 dollars an ounce early this morning, after touching its lowest level since July 20. The metal has fallen 3.6% this week, putting it on course for its worst week since June, while markets now see a 76% chance of a Federal Reserve rate hike in December. Silver was down at 54.31 dollars, while platinum rose to 1,574 dollars and palladium edged up to 1,056 dollars.

Oil prices rose early this morning, with Brent crude up 1.2% at 114.5 dollars a barrel after settling at its highest since May 4 on Thursday. WTI rose to 100.8 dollars, while Brent is on track for a third successive weekly gain. Saudi Aramco ordered the evacuation of its Dhahran headquarters on Thursday as fighting with Yemen's Houthis intensified.

Valero posted a record quarterly profit as supply disruptions lifted refining margins. William Hill owner Evoke reported lower third-quarter revenue, citing UK shop closures and unfavourable sports results.