Top Stories This Morning: Fears of a Crisis in Europe; Treasuries Regain Their Status as a Safe Haven

The unrest in France over the past weekend, during which government buildings and stores were damaged, is heightening concerns in Europe, where elections will be held in at least half a dozen countries next year. U.S. Treasury bonds have begun to regain their status as a safe-haven asset amid last week’s sell-off in tech stocks. Anthropic announced plans to transfer 5% of its shares to a fund aimed at mitigating the consequences of AI development—including its impact on the labor market—ahead of a potential IPO. Read about these and other topics in our roundup of key events as of the morning of October 19.

Mass protests against the rising cost of living in France have escalated into looting, arson, and clashes with police, raising fears that the unrest could spread across Europe ahead of elections in several countries in 2027, Bloomberg reports. More than 500,000 people took part in the demonstrations in France, and the damage from the riots is estimated at hundreds of millions of euros. About 1,500 stores were damaged, including 20 Carrefour supermarkets.

French President Macron has promised to crack down hard on violence, but the protests continue. Five French labor unions have called for a new strike on November 5. At the same time, the government’s ability to increase social spending is limited: the draft budget for 2027 calls for a €43 billion reduction in the deficit. Protests over rising prices have also spread to Italy, Belgium, and Portugal, while a strike is being planned in Spain ahead of early parliamentary elections.

On Monday, October 19, the euro fell 0.5% to $1.1183 amid escalating tensions between the U.S. and Ukraine and widespread protests in France, according to Bloomberg. Geopolitical risks and high oil prices are putting additional pressure on the euro. Over the past month, the European currency has underperformed among G10 currencies, and last week it fell to its lowest level since May 2025, the agency notes. Analysts expect the exchange rate to fall further below $1.11.

U.S. Treasury bonds have begun to regain their status as a safe-haven asset amid a sell-off in tech stocks and concerns about the outlook for the AI industry, according to Bloomberg. Last week, the yield on 10-year U.S. Treasury bonds fell by about 17 basis points, while the Nasdaq 100 index lost 5.5%. The last time a comparable simultaneous decline in yields and the tech index was observed was in April 2025, the agency notes.

Investors are concerned about the slowdown in Anthropic’s revenue growth and the decline in the value of CoreWeave’s debt. A cooling of the AI boom could ease inflationary pressures and reduce demand for debt capital: since the start of the year, U.S. investment-grade companies have issued approximately $1.7 trillion in bonds, 29% more than a year earlier. However, persistent inflation and high oil prices are limiting the upside potential for Treasury bonds. On Monday, the yield on 10-year Treasuries stood at about 5.06%.

South Korea’s largest pension fund, the National Pension Service (NPS), has seen the value of its major stock holdings plummet by 182 trillion won ($137 billion) amid a sell-off in tech stocks, according to Bloomberg. The value of its stakes of at least 5% in 287 publicly traded companies fell from 515.93 trillion won at the end of June to 333.53 trillion won as of October 15. The biggest losses came from SK Hynix (74.2 trillion won) and Samsung Electronics (56.9 trillion won), which accounted for about 72% of the total decline.

The decline came after the fund posted a record return of 27.2% in the first half of the year, when it had $1.35 trillion under management. South Korea’s Kospi index has lost about 39% from its June high amid concerns about the sustainability of the AI boom. The opposition criticized the NPS for failing to stabilize the market during the sell-off, the agency reports.

Anthropic plans to transfer 5% of its shares to a foundation that will study and mitigate the consequences of the spread of artificial intelligence, according to CNBC. Subject to shareholder approval, the fund’s stake could increase by 2 percentage points each time the company’s valuation rises by 50% relative to a set threshold. The funds will be directed toward charitable causes, support for workers whose jobs are at risk due to AI, and research into the technology’s impact on the labor market.

The initiative was announced ahead of Anthropic's IPO, which could take place in November. Experts believe that establishing the fund will help Anthropic strengthen its reputation amid growing concerns about the impact of AI on employment.

Shares of Chinese memory chip maker ChangXin Memory Technologies (CXMT) fell 6.5% on Monday, October 19, despite a forecast of sharp growth in financial metrics, according to CNBC. The company expects net income for January–September 2026 to total 131–132.5 billion yuan ($19.6–19.8 billion), compared with a loss of 5.28 billion yuan a year earlier. Revenue is forecast to total 265–270 billion yuan ($39.6–40.3 billion).

CXMT attributes its improved performance to the artificial intelligence boom, which has led to a shortage of DRAM and a sharp rise in prices. The Chinese company is strengthening its market position, competing with Samsung Electronics, SK Hynix, and Micron. According to data from Counterpoint Research cited by the TV channel, its share of global DRAM sales revenue rose from 5% to 10% over the course of a year.

— Japan's broad-based Topix index was virtually unchanged, while the Nikkei 225 fell 0.8%.

— Hong Kong's Hang Seng Index rose 0.5%, while mainland China's CSI 300 Index remained virtually unchanged.

— In South Korea, the KOSPI and KOSDAQ indices rose 0.2%.

— Australia's S&P/ASX 200 rose 0.4%.

— Nasdaq 100 futures rose 1.3%, S&P 500 futures rose 0.8%, and Dow Jones Industrial Average futures rose 0.5%.

This article was AI-translated and verified by a human editor