Stock exchanges, Europe closes on the brakes in anticipation of Jackson Hole. Tech still down on Wall Street

On the quarterly front, Home Depot's accounts on the eve of the meeting disappointed expectations, but the stock closed higher on the back of the prospect of increased demand in the current quarter. Lowe's accounts were above expectations, while Target results disappointed once again. On Thursday, the quarterly results of Walmart are expected. Speaking of quarterlies, the one from Estée Lauder, whose stock is down sharply, was negative: the US cosmetics group reported a wider loss and a drop in sales in the last quarter and published an outlook for the current fiscal year that did not meet Wall Street's forecasts. We are coming to the end, however, of a positive quarterly earnings season.

Sales continued on tech and communication services, following Tuesday's slide. Minus signs for Alphabet and MApple eta Platforms , which are part of the communications services sector, as well as for Nvidia Corp and Apple , which lead the tech sector. Oracle and Arm, among the worst-performing stocks in Tuesday's session, continued in the red. Many analysts fear that there has been an excessive enthusiasm for artificial intelligence. Traders attributed some of the declines in the US on the eve of the session to a critical report by the Massachusetts Institute of Technology in which researchers said that "95 per cent of organisations are not getting any return" from their investments in generative artificial intelligence, the technology that has driven US stocks to record levels in recent months. The stock drop also came just days after OpenAI CEO Sam Altman warned of the danger of an artificial intelligence bubble.

On the equities front, Fineco led the Milan stock market up 2.38%, followed by Snam (+1.86%). After the thud on the eve of the event caused by a possible de-escalation between Kiev and Moscow, Leonardo recovered and finished up +1.26%. For St. John's stock, -0.8%, which was affected by the weakness of the tech sector, which was weighed down by fears of an AI bubble: Nvidia and Apple were heavy on Wall Street, while in Europe Infineon dropped 1.78% in Frankfurt, Asm 1.74% in Amsterdam while Asml limited its falls to -0.64%. Back at Piazza Affari, Prysmian closed at the tail end of the main list at -4.27%, while Saipem also fell -2.85%.

Weak trading for banks on the eve of the shareholders' meeting of Mediobanca (-0.88%) on the takeover bid launched on Banca Generali (-0.1%). The shareholders of Piazzetta Cuccia will in fact be called to vote on the €6.3 billion offer launched by Mediobanca on the bank led by Gian Maria Mossa. Should the operation obtain a majority, the offer could start in early September. Also under the lens is the performance of the takeover bid by Mps (-0.6%) on Mediobanca itself, which exceeded 19%.

On the currency side, at the end of the day in Europethe euro/dollar trades at 1.165, little moved compared to eve, with the wait for Jackson Hole limiting movements. "With no Federal Reserve (Fed) meetings until 16-17 September, market participants will be listening very carefully to every word from Jerome Powell this Friday, looking for signals on a possible Fed alignment with the rest of the world, which has already gone down the road of rate cuts," comments Kevin Thozet of Carmignac.

"The tug-of-war between weaker-than-expected employment data and higher-than-expected inflation leaves the Fed chairman facing mixed signals. 'Not the most comfortable situation for what will (probably) be his last speech at the Wyoming symposium; especially considering the criticism he has received from President Trump and his entourage,' he adds. Amid pressure from Trump and market expectations, 'Powell is expected to relent and hint that the rate-cutting cycle will resume. This approach is widely expected, with traders expecting larger cuts than currently indicated by the dot plot,' he concludes.

Crude oil prices rose sharply after a bigger-than-expected drop in US inventories. Last week, oil stocks in the US fell by 6.014 million barrels to 420.684 million, according to data released by the Energy Department, with expectations for a 1.5 million drop. Gasoline stocks fell by 2.72 million barrels to 223.57 million, against expectations for a downward figure of 1.3 million. Distillate stocks, which include heating oil, rose by 2.343 million barrels to 116.028 million barrels, against estimates for an upward figure of 0.7 million barrels. Plant capacity utilisation increased from 96.4 % to 96.6 %, against expectations for 96 %.

Gas also progressed in Amsterdam to EUR 31.9 per megawatt hour (+2.3%).

A session of appreciation for gold, with the spot contract moving above $3.44o an ounce, while the dollar lost ground ahead of the Fed minutes and Powell's speech in Jackson Hole. The precious metal has traded in a narrow range in recent weeks, failing to break above $3,450 an ounce. "There is a growing belief among investors that the worst phase of tariffs-related uncertainties is now behind us," notes Mark Haefele, cio at Ubs Global wealth management. Since April, when gold prices had briefly touched $3,500 an ounce at the height of trade tensions, the yellow metal has lost about 3%. "However," Haefele continued, "we believe that gold can resume its rally over the next year and we expect it to reach $3,700 an ounce by June, up from our previous forecast of $3,500.

The spread between the BTp and Bund closed stable. At the close, the yield spread between the benchmark ten-year BTp and the German bond of the same maturity stood at 83 basis points, unchanged from the previous close and this morning's open. On the other hand, the yield on the benchmark ten-year BTp fell, in line with that of the Bund, to 3.55%, down from 3.58% at the eve's close.