Stock markets: Europe set to open lower amid AI fears and tensions in Iran
Mid-term elections are taking place in the US today. Crude oil and gas prices are rising again
European stock markets are set to open lower, whilst the debate continues over the existence of a potential artificial intelligence bubble – which yesterday dragged the Nasdaq and S&P lower – with investors continuing to shift away from tech stocks towards other market sectors. EuroStoxx 50 futures are thus down 1.38 per cent, whilst FTSE MIB futures are down 1.25 per cent.
“The market has not lost faith in AI, but it is losing patience with companies that are spending extraordinary sums without delivering returns that exceed already high expectations,” commented Chris Weston of Pepperstone. Adding to the jitters in the AI sector is the uncertainty surrounding today’s mid-term elections in the United States, with Polymarket putting the probability of a Democrat-controlled Senate at 78 per cent, whilst a Democrat-controlled House is considered almost certain.
Meanwhile, the quarterly results season continues on both sides of the Atlantic: yesterday, Apple – apart from Nvidia, which is due to report later – was the last of the Big Tech firms to be put through its paces. The group reported profits and turnover that exceeded expectations, thanks in part to price rises for its devices, but fell short of sales forecasts for the iPad in the fourth fiscal quarter. Today it will be Super Micro Computer’s turn, whilst in Europe all eyes will be on Ferrari and Intesa Sanpaolo in particular.
In the currency markets, the euro/dollar exchange rate remained stable at 1.1193 (from 1.1198 at yesterday’s close). The single currency is also trading at 176.65 yen (176.76), whilst the dollar/yen cross rate stands at 157.83 (157.85). On the energy front, energy commodity prices are rising again, with Iran’s chief negotiator in talks with the United States, Mohammad Bagher Ghalibaf, stating that it is now up to Washington to ‘avoid war’, whilst according to the Wall Street Journal, the United States reportedly attacked the island of Qeshm in Iran yesterday.
Brent crude is thus up 1.67 per cent at $106.5 per barrel, whilst WTI is trading at $98 (+1.6 per cent). Gas prices in Amsterdam are also up at €97.5 per MWh (+2.8 per cent), whilst the International Energy Agency reports that Europe is set to enter winter with the lowest levels of natural gas storage since 2013, which could prolong tensions on the global gas market into 2027.
