The Australian share market closed deep in the red, with the S&P/ASX 200 ending Thursday down 2.03% at 8,708.80. The drop erased about $70 billion in market value and marked the index’s worst session since April 2025. The benchmark also finished the week 1.8% lower. Source: Red Leaf Securities via X Why did selling accelerate so fast? Investors reacted to a broad global retreat from risk. Wall Street Losses Set the Tone Heavy losses across U.S. markets shaped sentiment throughout the session. The S&P 500 fell 1.2%, the Nasdaq Composite slid 1.5%, and the Dow Jones Industrial Average dropped more than 500 points. Combined, the declines wiped roughly over $1 trillion from U.S. equity values. Technology stocks again led the retreat as concerns deepened around artificial intelligence spending and earnings sustainability. Alphabet shares weighed on sentiment after the company flagged a sharp rise in AI-related capital spending. Investors questioned how quickly returns might materialise. Attention also turned to Amazon’s pending earnings, with markets closely watching cloud revenue growth. Bitcoin and Crypto Add to Market Stress Crypto markets' crash added to the pressure. Bitcoin has fallen more than 20% over the past week and dropped to its lowest level since 2024. The asset has now lost nearly half its value from the October 2025 peak. As bitcoin broke below key levels, confidence across risk assets weakened. Crypto-linked stocks also slid sharply, reinforcing the global sell-off. Commodity markets recorded violent swings too. Silver plunged as much as 17% during the session, erasing a recent rebound as Chinese buyers exited positions. Gold also pulled back, falling 13% from recent record highs. These moves followed a period of rapid gains that had drawn investors seeking protection from market volatility. How long can safe-haven trades hold when momentum breaks? Economic Data Fuels Uncertainty Fresh U.S. labour market data unsettled investors. Weekly jobless claims rose more than expected, and job openings fell to their lowest level since 2020. Separate data showed January marked the worst month for layoff announcements since 2009. Bond markets reacted swiftly, with the U.S. 10-year Treasury yield sliding to 4.19% from 4.29%. Falling yields reflected growing expectations of economic slowdown. Australian Policy in Focus In Australia, Reserve Bank governor Michele Bullock defended this week’s interest rate rise while addressing an economics committee in Canberra. She pointed to persistent inflation risks despite softer global growth signals. Her comments arrived as markets reassessed whether tighter financial conditions could deepen volatility across equities and housing-sensitive sectors. Global Markets Sink in Unison Losses extended across Europe and Asia. London’s FTSE 100 fell after the Bank of England held rates steady. France’s CAC 40 and Germany’s DAX also closed lower. The coordinated retreat highlighted how closely markets now move in response to shifts in U.S. tech stocks, crypto prices, and economic data. By the close, the ASX reflected the same risk-off mood seen offshore. With tech stocks under pressure, commodities reversing, and bitcoin sliding fast, investors showed little appetite for risk. Markets now turn to upcoming earnings and economic releases for direction. Will volatility ease, or does the selling still have room to run?
