Market Selloff Deepens, Amazon AI Spending Vows, More
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The UK stands apart as a place to do business, not because of one advantage, but many working together. Over 10 trillion pounds in capital, four of the world's top universities, a 10-year industrial strategy in action, its stability with dynamism, global reach with local depth. It all adds up to greater growth. Find out more at business.gov.uk slash growth.
News when you want it with Bloomberg News Now, I'm Doug Krisner. And we begin with the stock market, where it was another day of heavy selling in software shares, given worries over the impact of AI. A new version of Anthropic's most powerful AI model can carry out financial research. It's also designed to be better at a range of other work-related functions, and that would include making spreadsheets and presentations, as well as software development. Today, the S&P 500 software and services sub-index fell by more than 4.5%. After the bell, Amazon's first quarter outlook was below consensus, and the company said it intends to spend $200 billion this year on data centers, chips, and other equipment.
Now, the market is suspecting that Amazon's massive bet on AI will take longer to pay off than anticipated. Here is Bloomberg analyst Poonam Goyal.
They need to invest, right? We know that Amazon has to continue to invest in cloud services. It needs to invest in AI. So there's a lot of catch up that needs to be done here. I think the long run narrative here is still good. The underlying results were solid across both AWS and retail.
That is Bloomberg analyst Poonam Goyal. Shares in Amazon were down 10 percent in late U.S. trading. At the same time, there was a sell-off today in Bitcoin. It tumbled below 64,000 as an unwinding of leveraged bets deepened. Bitcoin lost more than 12% during New York trading, and Nobel laureate Paul Krugman says Bitcoin is facing a real crisis of faith.
A lot of people sold Bitcoin as being the next gold. And it turns out that in the face of doubts about stability, doubts about politics, the next gold turns out to be gold, not Bitcoin. I think it's a big wake up for people that maybe this isn't actually going to be an enduring asset.
That is Nobel laureate Paul Krugman speaking on Bloomberg Businessweek Daily. Bitcoin has wiped out all of its gains since President Trump's election set off a speculative rush into cryptocurrencies. Now, Bitcoin's plunge has rocked the digital asset complex, and few companies are more exposed than the Bitcoin treasury company Strategy Inc.
What are the current trends in the stock market affecting software shares?
Today, after the bell, the company confirmed a net loss of $12.4 billion for the fourth quarter. Shares in Strategy Inc. were down by more than 2% in late U.S. trading, but these shares have lost 45% of their value so far this year. Rio Tinto Group is walking away from talks to acquire Glencore. Such a deal would have created the world's largest mining company. However, the two sides failed to agree on valuation. Here is Bloomberg's Carmele Argana.
I think the main point to consider is that there was this disagreement that they just couldn't get over between Rio Tinto and Glencore regarding the premium that Rio would be paying to acquire Glencore's shares. Now, Rio is almost twice the size of Glencore in terms of market capitalization. But from our reporting, from Bloomberg News reporting, I understand that Glencore had been seeking a share exchange ratio that would have given investors about 40% of the company. So it was really that disagreement about the premiums that caused that deal to fall through.
That is Bloomberg's Carmelia Argana. Now, this deal would have also allowed Rio to double existing copper output. President Trump has unveiled his TrumpRx website. This is a direct-to-consumer platform, and it represents the Trump administration's effort to lower prescription drug costs in the U.S. Here is Trump.
Americans have long been paying the highest drug prices anywhere in the world, while other countries often paid pennies on the dollar for the exact same drugs. We were essentially subsidizing the entire world and subsidizing by hundreds of billions of dollars every year.
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