Indonesian stocks sink most since 1998 on an MSCI warning

Jakarta stocks had their worst day since 1998 on Friday after MSCI moved to drop Indonesia from its emerging-market indexes. Oil settled higher, shares tied to artificial-intelligence computing fell again, and the S&P 500 lost 1.1%.

MSCI moves to drop Indonesia from emerging markets

iShares MSCI Indonesia ETF, ETF:EIDO, fell 14.9% to $9.94, just above a 52-week low of $9.91. The fund is down 46.8% this year.

"MSCI considers Indonesia's continued classification as an Emerging Market no longer appropriate and is launching a consultation on a proposal to reclassify Indonesia as a Standalone Market," the firm said Thursday.

A standalone market sits outside the developed, emerging and frontier groups in MSCI's main indexes. Reuters reported that the change would exclude Indonesian stocks from the indexes passive funds track. MSCI cited opaque shareholding structures and suspected coordinated trading.

MSCI will decide by the end of June 2027. It also said it expects to proceed unless the consultation finds clear evidence of material improvement in how the market is governed and how it functions. The announcement came Thursday, after the U.S. close, so Friday was the first session the fund could fall. It fell as if the reclassification were the likely result, not a question left open until 2027.

Reuters reported that Jakarta's benchmark fell 8% at the open on Friday, triggering a 30-minute trading halt, and later fell as much as 11.4%, the steepest one-day drop since 1998. Trading Economics reported the index closed down 11.3% in the same session.

ETF:EIDO fell further than that close. Financial companies are about half the fund, and the big banks fell harder than the index.

Trading Economics reported that Bank Central Asia, the largest holding, fell 14.8% in Jakarta, with Bank Mandiri and Bank Rakyat Indonesia down by about the same.

Oil rises as Hormuz attacks continue

Brent crude settled up 3.7% at $109.86 a barrel, and West Texas Intermediate settled up 3.5% at $101.41, CNBC reported. USCF United States Brent Oil Fund LP, ETF:BNO, rose 3.6%. USCF United States Oil Fund LP, ETF:USO, rose 2.8%.

CNBC tied Friday's rise to escalating Iranian attacks in the Strait of Hormuz and a Ukrainian vow to hit Russian refineries. The war that put the strait at risk began on Feb. 28, Reuters reported. U.S. Central Command said Thursday that a projectile from Iran's Islamic Revolutionary Guard Corps hit the container ship GFS Pride, which sank while being towed to shore.

State Street Energy Select Sector SPDR ETF, ETF:XLE, rose 2.5%. Global X MLP & Energy Infrastructure ETF, ETF:MLPX, rose 3.0%.

CoreWeave falls on the cost of its AI debt

CoreWeave fell 11.9% to $61.39, near a 52-week low of $59.51, and is down 25% over the past five sessions. It rents out computing capacity for artificial intelligence and, Reuters has reported, borrows heavily to buy the Nvidia chips that run that business.

Reuters reported that the yield on CoreWeave's October 2031 bond briefly surged past 16% on Thursday, and that the shares and the bond were headed for steep weekly losses on concern about the debt behind the AI buildout.

Nebius Group fell 12.2% and IREN Limited fell 11.2%. Roundhill Neocloud ETF, ETF:NCLD, a fund of companies that rent out that kind of computing power, fell 11.4%.

Chip funds extend a week of losses on Chinese competition

VanEck Semiconductor ETF, ETF:SMH, fell 3.4% and is down 10.5% over five sessions. Roundhill Memory ETF, ETF:DRAM, fell 5.8% and is down 18.8% over five sessions.

Micron Technology fell 5.6%.

CNBC reported Friday that chip shares have struggled all week on concern about competition from China. It reported Tuesday that memory-linked stocks fell after China's ChangXin Memory Technologies announced progress on a new chip design.

Nvidia, about a fifth of ETF:SMH, fell 1.4%, a smaller drop than Micron's. The Nasdaq Composite fell 1.9%, steeper than the S&P 500's 1.1% loss.