In what's shaping up to be a week of heightened nervousness, global markets are feeling the aftershock of a tech-driven rout. The Nasdaq tumbled 1.5%, even as the Dow Jones Industrials notched an intraday high—a stark reminder that investor caution can coexist with pockets of optimism. The ripple effects dragged the S&P 500 down 0.6%, and U.S. futures remained subdued into Wednesday.
Why the sudden fear? Observers point to recent warnings by OpenAI's CEO about potential bubbles in the AI sphere, coupled with studies questioning the returns on hefty AI investments and their impact on jobs. Investor unease is heightened further by anticipation of Nvidia’s upcoming earnings and speculation over a possible government equity injection into Intel. With the Federal Reserve’s Jackson Hole symposium on the horizon, markets are treading carefully.
Despite the talk of rate changes, Fed futures held firm, signaling just over an 80% chance of a rate cut next month. Treasury yields remained stable and the dollar gained slight strength. The housing sector continues to send mixed signals—July housing starts came in unexpectedly strong, yet building permits hit a five-year low.
Overseas benchmarks also mirrored Wall Street’s unease: Japan’s Nikkei slid 1.5%, and South Korea’s Kospi slipped 0.7%. European markets held steady after early declines, buoyed by inflation data that matched expectations, while the U.K. saw hotter-than-anticipated inflation, which analysts largely blamed on seasonal travel pricing. In a contrast to the gloom, China's broader bourses surged, with the Shanghai Composite climbing to decade-high territory—fuelled by a rotation into domestic equities and optimism about fresh stimulus measures.
No comments:
Post a Comment