Risk aversion surges across the board, the AI sector leads declines in US stocks, and Bitcoin holds above $81,000 for now.

Overnight to early this morning, risk aversion across U.S. markets surged. Catalysts included attacks on Saudi energy facilities, and reports that the U.S. and Israel have drafted plans to strike Iran after the U.S. midterm elections. Brent crude climbed to a five-month high, while WTI crude hit a five-month peak, approaching $100 per barrel. Adding to uncertainty over the midterm elections, these factors pushed yields on 2-year to 10-year U.S. Treasuries down by more than 15 basis points. The French-German yield spread widened to 175 basis points at one point, the highest level since the 2011 European debt crisis. According to Bitget market data, the S&P 500 closed at 7,662.54 on Thursday, down 1.22%, ending its three-day winning streak. The Nasdaq Composite fell 2.60%. By sector, U.S. consumer staples, healthcare, and utilities led gains, while semiconductors, memory chips, and optical communications led losses. The chip index dropped 6.72%. In individual stocks, per BIT (bit.com) market data, CoreWeave fell 10%, Micron Technology declined 6.26%, Western Digital fell 6.43%, dropping more than 5% in post-earnings after-hours trading. Optical communications firm Coherent tumbled over 12%, while AAOI and LITE both fell more than 11%. Meta’s third-quarter revenue beat expectations, but its capital expenditure continued to rise, lifting future spending commitments to $825 billion and turning its free cash flow negative. The company’s five-year credit default swap (CDS) hit an all-time high. Funding concerns spread along the AI industry chain. Meta closed down 6.98% on Thursday, and fell an additional 0.61% in after-hours trading. Crypto-related stocks also fell, with MSTR down 5%, BMNR dropping over 6%, CRCL declining 3.44%, and COIN falling 4.49%. Per HTX market data, Bitcoin briefly dipped below $81,000 at midnight, then stabilized and consolidated, currently trading at $81,347.20.