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Which tail is wagging the market dog?

What a good week for the markets. Global equities had their worst week since April as the temperature for AI stocks began to rise.

The Nasdaq on Thursday made its steepest move from green to red since President Donald Trump’s ‘Emancipation Day’ shocked stocks in April. And it resonated all over the world Stoxx 600 Germany touches one-month low DAX It fell to levels not seen since June, and Asian stock markets closed the week deep in the red.

What does such a volatile week for stocks and other asset classes mean for the next trading week?

Much of the discussion around the CNBC International desk this week has centered on what has caused investors to become more wary of the year’s favorite stocks and some of the asset classes that have been wreaking havoc since the Trump administration returned to the White House.

In short, the market wanted to know; Which tail is wagging the dog?

Robert Nickelsberg | Getty Images

Tail 1: Artificial Intelligence anxiety

Tail 2: Crypto concerns

This is “revenge of the old economy.” That’s the view of Carlyle’s Chief Strategy Officer Jeff Currie, who told CNBC’s Julianna Tatelbaum in London that there is a connection between AI jitters and big moves seen in crypto markets this week.

“People who own big tech also own crypto. They sell cypto to fund losses in big tech, and then it becomes a violent downward cycle.”

Tail 3: Delayed data

Data delayed by the U.S. shutdown did little to provide clarity on the Fed’s next step after a rise in the unemployment rate and other downward revisions in September spooked investors.

Latest minutes from the FOMC also suggest that skipping a move in December is preferred; “We have moved the December cut to the first quarter, most likely January,” Standard Chartered’s Steven Englander said in a recent note. He added that “hawk sentiment seems to be more stable than dovish sentiment.”

Next week, expect to hear from a variety of ECB voices, including ECB President Christine Lagarde, Executive Board Member Frank Elderson and Governing Board Member Piero Cipollone, who will be performing at different events in Europe. On Friday, Lagarde called on Europe to move “from just being resilient to being really strong.”

Tail 4: Financial emotions

All the stock market volatility may have provided a bit of a boost to British Prime Minister Rachel Reeves as she counts down the final days for Wednesday’s budget announcement. The changes and turns experienced so far in the bond market, which was declared as the financial event of the year, continue. Ian King will be live from Westminster with all the details; Meanwhile, CNBC’s UK Stock Exchange newsletter describes how Reeves plans to tackle a £30bn fiscal deficit.

Brit Reeves paints confusing picture as pressure mounts from all sides

The easy answer is that it’s likely all those tails are wagging the market dogs, but with so many market forces at play perhaps the safest bet is that volatility will continue into next week’s trading.