The Nikkei average rebounded for the first time in 7 trading days, closing at ¥65,324.29. The previous day’s decline was triggered by the sharp fall in the bond prices of US cloud company CoreWeave, and caution is spreading over the potential impact of higher crude oil prices resulting from the situation in the Middle East.
On 16 October, the Nikkei average rebounded after falling for the previous 6 trading days, closing at ¥65,324.29, up ¥898.34 from the previous day. The trigger for the decline was a sharp fall in the bond prices of US emerging cloud-services company CoreWeave, which spread concerns across the market that data-center financing costs could increase. Buying returned to AI- and semiconductor-related stocks in the Nikkei.
In the US equity market, the Dow Jones Industrial Average fell for the first time in 11 trading days, declining $175.28 to $52,002.41. CoreWeave is not a Dow component, but was heavily sold in the same session. Stocks including Alphabet, Salesforce, Cisco Systems, and Microsoft also fell, raising the possibility that weakness in AI- and semiconductor-related stocks could spill over into Japanese equities.
In the crude oil market, renewed uncertainty over the situation in the Middle East brought higher crude prices into focus amid concerns over energy supplies. WTI in the New York market rose into the $101-per-barrel range and temporarily reached its highest level in approximately 1 month.
Points of focus ahead include earnings announcements from Tesla and Meta in the US on the 17th and from Disco on the 22nd. Some observers believe strong earnings could reduce the risk posed by the CoreWeave shock.