European stocks slide as AI investment concerns deepen

European shares fell sharply on Friday following heavy losses on Wall Street, as investors questioned the pace of AI infrastructure development and returns on technology spending. The FTSE 100 closed down 108.72 points, 1.0%, at 10,673.94. In continental Europe, Paris’s CAC 40 fell 0.8%, while Frankfurt’s DAX 40 declined 1.9%. US stocks partially recovered on Friday after the Nasdaq slumped 5.5% on Thursday, entering correction territory.

Democratic midterm election wins heightened concerns about policies affecting data centre construction. UBS said 415 local moratoriums on construction were active, with many newly elected officials having campaigned against the facilities. Restrictions could affect where and how quickly projects proceed, delaying the monetisation of investment commitments. Barclays Capital and Bank of America described the selling as indiscriminate, although Barclays warned that further systematic selling remained possible.

Meanwhile, stronger US employment data lifted the dollar and Treasury yields. Nonfarm payrolls increased by 165,000 in October, exceeding the FXStreet consensus forecast of 65,000, while unemployment fell to 4.1%. The figures increased expectations of a December Federal Reserve rate rise. Citigroup retained that expectation but said continued technology-sector losses could prompt the central bank to hold rates steady.