Wall Street Dips as AI, Tech Stock Momentum Fades, European Markets Mixed
Wall Street dipped as momentum in Artificial Intelligence (AI) and technology stocks faded, with sell pressure seen in the Magnificent Seven ahead of consumer inflation data.
US equities fell with the S&P 500 down 0.32%, the Nasdaq Composite off 0.60%, and the Dow Jones down 0.34% on Tuesday as a deadlocked Strait of Hormuz negotiation pushed oil prices sharply higher.
The sustained global energy crisis stoked inflation concerns ahead of today’s July consumer price index (CPI) print on Wednesday, prompting a rotation out of large-cap technology names including Alphabet, Amazon, and Apple.
Also, European markets closed mixed yesterday, with the Euro Stoxx 50 edging up 0.24% to a fresh record close and the FTSE 100 slipping 0.17%, as energy stocks gained on rising oil prices driven by the ongoing Strait of Hormuz impasse,
Meanwhile, the FTSE lagged continental peers due to weakness in defensive names as broader conviction remained thin ahead of the US CPI release.
A divergent session across Asia set the tone overnight, with commodity strength providing a partial offset to equity-market softness in key regional bourses, the stockbroking and portfolio management subsidiary of First National Bank (FNB) said in a brief.
The Nikkei 225 advanced 0.52% this morning, supported by a weaker yen and resilient export-sector sentiment, while the ASX 200 slipped 0.49% as softer domestic demand signals weighed on consumer-facing names.
The Hang Seng Index fell 1.17%, pressured by renewed caution around Chinese credit growth ahead of money supply data due later today.
The Johannesburg Stock Exchange (JSE) is set for a cautious open this morning as global futures are barely changed across the board, offering little directional conviction, while Asian markets are trading with a split bias.
Tencent is trading down 2.51% in Hong Kong, a meaningful move that is likely to weigh on Naspers and Prosus at the open, given the scale of their underlying exposure to the Chinese technology group.
The ASX 300 Metals and Mining Index is down 0.09%, a negative read across for local resource counters. However, gold and platinum are firmer this morning, offering positive cues for precious metals counters on the local bourse.
The JSE closed firmly lower on Tuesday with red screens across the board as investors monitored developments between the US and Iran following an announcement from Iran that the Strait of Hormuz will remain shut until specific national conditions are met and hopes for a maritime de-escalation deal faded after new demands from both Washington and Tehran.
The All Share Index shed 1.34% to 115 943 points and the Top 40 fell 1.38% to 108 086 points. Industrials (-2.86%) led the decline, with significant pressure from consumer and telecom counters like the MTN Group (-5.99%), AB InBev (-5.01%) and British American Tobacco (-4.48%).
Financials (-1.38%) tracked the weaker market sentiment, with investors remaining cautious ahead of further earnings releases from the sector. Resources closed flat by the end of the trading session, supported by gains in Thungela (+6.51%), Sasol (+5.03%) and Glencore (+2.83%), offsetting declines in precious metal stocks. Global Equities Markets Mixed as Rising Energy Costs Dampen Momentum
