US Indexes Dip as Tech Earnings Disappoint, European Stocks Rally
US indexes dipped as AI and semiconductor stocks sold off after major technology companies reported disappointing earnings, amid broader concerns about AI spending and profitability.
Concern over the AI trade remains the dominant cross-market theme, after disappointing technology earnings intensified Friday’s US selloff, stockbroking and portfolio management subsidiary of First National Bank (FNB) said in a brief on Monday.
According to market reports, the NASDAQ ended 2.86% lower last week, while the S&P 500 lost 1.82% and the Dow Jones fell 1.09%. Market analysts said US futures are firmer ahead of major earnings, the jobs report, ISM surveys, and the mid-term elections.
Europe proved more resilient despite sovereign debt sustainability concerns, with the FTSE 100 ending the week up 0.07%, while the Euro Stoxx 50 declined 1.22%.
In Asia on Monday, technology shares are supporting Hong Kong, where the Hang Seng Index is trading 0.61% higher, although weak Chinese PMI readings and AI valuation concerns are tempering sentiment.
The Nikkei 225 is up 0.44%. Australia’s ASX 200 closed down 0.58%, as weakness in technology, mining and healthcare outweighed stronger banks ahead of Tuesday’s expected Reserve Bank of Australia rate increase.
In South Africa, the Johannesburg Stock Exchange (JSE) is set for a firmer open this morning, with positive global futures and a broad recovery across most Asian markets setting the stage for a rebound after the All Share and Top 40 closed lower.
Tencent is up 3.18% so far, offering a constructive read-through for Naspers and Prosus.
On the resources side, the S&P/ASX 300 Metals and Mining Index is down 1.50%, pointing to pressure on diversified miners, while sharply weaker Brent may weigh on energy counters. Firm gold and platinum prices should nevertheless support gold miners and PGM counters.
The JSE closed sharply lower on Friday, with the All Share falling 2.20% and the Top 40 declining 2.42%, marking their worst single-day performances since June.
Market sentiment was hit by a global technology sell-off and a sharp decline in precious metal prices. Gold fell below the $ 3,900-per-ounce mark as rising oil prices fuelled inflation concerns and prompted investors to liquidate bullion positions to cover losses elsewhere.
As a result, resource shares led the decline, tumbling 5.12%, while precious metals fell 6.19%. Industrials proved relatively resilient, edging only marginally lower, while Financials declined 1.95% as the broader risk-off environment weighed on sentiment.
Meanwhile, domestic economic data was broadly supportive, with South Africa reporting a strong trade surplus and a narrower-than-expected budget deficit, though global market pressures overshadowed these gains. Nvidia’s $3bn Meta Bet Exposes Major AI Unknown
