For months, technology stocks have been Wall Street’s favorites, on the promise of artificial intelligence. But something has changed, as you may have read in last week’s column. Investors have begun to move their money away from technology and into safer areas of the stock market, such as household goods. Investment specialists call this shift a rotation. And this week, AI-related companies continued to see their share prices fall, despite reporting impressive results: rising sales, growing order books and optimistic forecasts. In this market psychology, good news is no longer enough.

This reserved reaction suggests investors are starting to doubt the durability of the AI spending spree on data centers. Two questions are on everyone’s mind: who will pay for the vast data centers being built for artificial intelligence, and will the (so-called) returns arrive in time? Meanwhile, the flight to quality is widening, and doubtful investors have fled to safer assets such as the yen and government bonds.

Equities: when good news is not good enough. The S&P 500 slipped about 0.5% over the week and the Nasdaq about 0.7%, while the Dow Jones, home to steadier, older businesses, edged higher. On Thursday the Nasdaq suffered its worst day since June. Chipmakers, whose products are needed to build the data centers and which were already down about 10% the week before, took the brunt again.

What it means. A good part of the AI infrastructure is financed by debt, and it only makes sense if profits eventually cover the cost. This week investors began to doubt the timing, so they sold the companies most exposed to the bet. The Dow held up because its members do not depend on it.

Rates and credit: nervous money seeks shelter in government bonds. Government bond yields, the interest rate investors demand to lend to a state, eased. The US 10-year Treasury yield fell 11 basis points (0.11 percentage points) to 4.99%, its third weekly decline, while the 2-year yield, more sensitive to expectations about the Federal Reserve, ended near 4.68%. In Europe, France’s 10-year yield (OAT) stood at 5.05%, against 3.33% for Germany’s Bund, the widest gap since 2011. Lenders have heard many promises of budget discipline, and they now charge for believing them once more.

What it means. As shares wobble, nervous money looks for a safe place, and government bonds are one of them. Their prices rise and their yields fall. That does not mean cheaper money is on the way: traders put the odds of a Fed rate rise in December at around 71%, because dearer oil keeps inflation alive. For households, the 10-year yield helps set the cost of mortgages and business loans, so it matters well beyond Wall Street. The French gap is the price of worry about Paris’s public finances: lenders ask for roughly 1.7 points of extra interest to hold French debt rather than German. Risk, it turns out, costs more for a country whose finances are already under strain.

Currencies: the yen, another refuge in a jittery week. The euro slipped to about 1.12 dollars, weighed down by that French concern. The yen strengthened to a one-month high near 156.8 per dollar, as nervous investors reached for it as a refuge.

What it means. In a jittery week, money flows towards what feels safe. The euro, by contrast, carries France’s budget problem on its back. For Europeans, a weaker euro makes a trip to New York, or a barrel of imported oil, a little dearer.

Commodities: oil climbs again. Brent crude, the global oil benchmark, rose about 6% to roughly USD 116.7 a barrel. US crude (WTI) reached about USD 103. Gold ended near USD 4,008 an ounce, down on the day, and copper, a gauge of industrial demand, settled around USD 6.48 a pound.

What it means. Dearer oil lifts what we pay at the pump and on household bills, which is why consumer confidence sits near a record low. It also explains gold’s stumble: gold pays no interest, so the prospect of higher rates makes it less attractive.

The week ahead: will the biggest spenders reassure investors? The Federal Reserve meets on Wednesday and is expected to hold rates, but investors will read every word for a hint of a December rise. Alphabet and Microsoft report the same day, Amazon on Thursday. Their spending plans for AI will show whether Thursday’s fears were overdone. US midterm elections follow on November 3.

What it means. With third-quarter profits growing above 32%, according to LSEG, results are not the problem. Like any lender, investors want to see the plan: the test is whether the biggest spenders can convince them their AI investments will pay off.

See you next Monday for the next chapter of this story.