EU stock markets in the red amid AI fears and tensions in Iran. In Milan, Ferrari shares take a tumble following the results

(Il Sole 24 Ore Radiocor) - European stock markets are trading in the red, whilst the debate over the existence of a potential artificial intelligence bubble continues, with investors continuing to shift away from tech stocks towards other market segments. Meanwhile, the Tokyo Stock Exchange is closed for Culture Day. “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 nervousness surrounding the AI sector is the uncertainty ahead of the US mid-term elections, with Polymarket putting the probability of a Democrat-controlled Senate at 78 per cent, whilst a Democrat-controlled House is considered almost certain. Meanwhile, tensions are flaring up again in Iran, with the US – according to the Wall Street Journal – reportedly having attacked the island of Qeshm the day before, whilst, as reported by Ynet News, a senior Iranian official is said to have stated that ‘Iran and the United States are a long way from reaching an agreement to end the war’.

In this context, the FTSE MIB in Milan is falling sharply, as are the other stock markets across Europe.

Tech shares still in turmoil in Europe: they slip in Milan Stmicroelectronics , Prysmian (also affected by Deutsche Bank analysts’ assessment, who have cut the target price to 163 euros from 167) and Technoprobe . In Frankfurt, Infineon Technologies are down in Frankfurt, whilst in Amsterdam too, industry giants such as ASML , ASM and BE Semiconductor. “Whilst investors used to welcome new investments in AI, sentiment has shifted in recent weeks: announcements of bond issues or capital raises by hyperscalers, such as Oracle’s recent announcement, tend to trigger selling in companies linked to AI infrastructure,” write MPS analysts. The experts highlight that the sector is being weighed down by both “doubts over the monetisation of investments and fears of an AI bubble, as well as the prospect of increasing in-house production of hardware components”. Investors are also focusing on Apple’s financial results. According to Akros, the company’s guidance for the supply chain is “mixed”: “on the one hand, better prospects on the revenue front; on the other, weaker margins, which could entail risks in terms of contract prices”.

Elsewhere on the Milan stock exchange, oil companies were also down, despite the rise in crude oil prices, with Tenaris , Saipem and Eni . Also down were Stellantis is also down, with October registrations falling by 5.5 per cent. The opposite was true for Lottomatica Group , buoyed by the results released this morning, which showed growth in profits and revenue. Buying was also seen in Terna and Snam . Ferrari skids and slips to the back of the pack following the results.

In the currency markets, the euro/dollar exchange rate remained stable at around 1.12 (from 1.1198 at the previous close). 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 is reported to have attacked the island of Qeshm in Iran yesterday. Consequently, Brent has risen back above $105 a barrel, whilst WTI is still trading below $100. Gas prices in Amsterdam are also up, exceeding 97 euros per MWh, whilst the International Energy Agency reports that Europe is set to enter winter with the lowest natural gas storage levels since 2013, which could prolong tensions on the global gas market into 2027.