Stocks Fall, Oil Rises as Gulf Stalemate Deepens Risks
Global stocks fell on Thursday as worries about artificial intelligence spending weighed on technology shares, while a stalemate in the Gulf and Houthi attacks…
Stocks fall oil rises as investors weigh a Gulf stalemate, attacks in Saudi Arabia and fresh doubts about artificial intelligence spending. Global shares retreated on Thursday, with MSCI’s All-World index down 0.4% and on course for its largest daily decline in two weeks.
Brent crude rose nearly 3% to $112 a barrel, near a five-month high, after more Houthi attacks in Saudi Arabia raised fears of wider conflict and disruptions to Middle Eastern oil supplies. The move came as technology stocks fell across markets from Seoul and Tokyo to Amsterdam and Paris.
Investors faced pressure from several directions. “There are lots of crosscurrents in markets at the moment, which are grappling for a narrative right now,” Ben Laidler, head of macro and equity strategy at Bradesco BBI, said.
AI spending concerns weigh on technology shares
Meta reported third-quarter revenue late on Wednesday that beat expectations. The company’s results, however, did not sustain optimism among investors: its plan to issue non-voting stock revived concern about its growing capital commitments.
Meta shares fell around 3%. The company also faced a legal setback overnight, after a judge in New Mexico ordered it to pay a $25 billion penalty in a data privacy case.
Laidler said investors were questioning whether the artificial-intelligence earnings story that has supported US earnings and spread to global equities would hold up. “The big concern is that AI-driven earnings narrative, which has supported US earnings and spread to global equities, may be challenged here,” he said.
The market reaction reached beyond Meta. Tesla shares dropped nearly 4% in premarket trading after the company reported earnings and cut its spending forecast ahead of a possible merger with SpaceX. The source report did not provide further details about the possible merger.
The STOXX 600 fell 0.7% in Europe, with technology-related companies including ASML, Schneider Electric and Siemens Energy among the stocks weighing on the index. US stock futures were down between 1% and 1.7%, pointing to a lower opening later in the day.
Oil jump adds pressure as bonds draw buyers
For households and businesses, the oil move puts renewed attention on the risk of supply disruption and higher energy costs. The Reuters report tied the rise in crude directly to the possibility of wider conflict in the Middle East; it did not give an estimate of how the price move might affect consumers.
Concern about possible damage to the global economy also sent investors toward government bonds, despite worries about a sustained increase in inflation. US Treasury yields fell by the most in a week. The 10-year note was last 10 basis points lower at 5.05%, trading below the French equivalent for the first time in 13 years.
French government bonds remained under pressure as investors watched whether the government could contain social unrest and control spending. French 10-year yields rose 11 basis points to 5.107%, putting them on course for their largest weekly rise since May.
Currency moves were mixed. The euro fell 0.3% to $1.12 on Thursday, while the dollar index rose 0.1%. The yen gained safe-haven demand, and the dollar fell 0.7% against it to 157.1 after Deputy Bank of Japan Governor Ryozo Himino signalled he was ready to raise borrowing costs.
Gold did not attract the same demand for safety, falling 1.8% to $4,070 an ounce. Bitcoin and ether each lost 3.5%, trading at $81,837 and $2,405, respectively. Investors will continue weighing corporate earnings against the Gulf standoff and the latest signals on AI spending.
Source: finance.yahoo.com
