US, European Markets Dip on AI Concerns, Elevated Energy Costs
Global markets face sell pressure as fears over AI spending and rising energy costs dampen buying interest in equities, prompting investors to dump tech and semiconductor stocks.
US equities ended a second straight week of losses amid AI spending concerns and higher oil prices, with the S&P 500 down 0.52%, the NASDAQ 0.21% lower, and the Dow Jones down 1.23%.
Concerns about whether earnings can justify heavy artificial intelligence investment are setting the tone as investors await major technology results and key central bank decisions, First National Bank (FNB) said in a brief.
Investors have shifted attention to the Federal Reserve, which is expected to hold rates unchanged at Wednesday’s policy announcement.
Europe also finished soft, with the FTSE 100 down 0.32% and the Euro Stoxx down 0.31%, ahead of an anticipated hold at the European Central Bank’s interest rate decision on Thursday.
In Asia, concerns about technology valuations and uncertainty over China’s growth outlook are offsetting easing oil prices, although the Hang Seng Index is trading 0.44% higher.
The Nikkei 225 is down 0.25% ahead of the Bank of Japan meeting on Friday, while the ASX 200 closed 0.17% higher despite concerns that stubborn inflation may require further rate increases.
In South Africa, the Johannesburg Stock Exchange (JSE) is set for a firmer open this morning as modest gains in global futures offset a mixed Asian session, offering scope for a rebound after the All Share and Top 40 closed lower.
With Tencent up 0.73%, Naspers and Prosus show a positive spillover, with the 1.41% rise in the S&P/ASX 300 Metals and Mining Index supporting local resource counters.
However, the offshore macro signal remains uneven, with the US 10-year yield below 5% and policy uncertainty lingering ahead of key central bank meetings this week.
On the commodities side, stronger gold bodes well for gold miners, although weaker platinum may temper demand for PGM counters and a sharp decline in Brent could weigh on energy shares.
Local equities closed lower on Friday, with broad-based selling pressure pushing all major indices into negative territory. The All Share fell 0.47% to 108 020, while the Top 40 declined 0.55% to 99 991.
Resources were the worst-performing sector, down 1.26%, due to precious metal stocks coming under pressure (-2.24%) as gold prices retreated amid oil-driven inflation concerns and a stronger US dollar, following escalating Houthi attacks on Saudi Arabian oil infrastructure that raised fears of supply disruptions.
PGM stocks also weakened after Valterra reported weaker-than-expected third-quarter mined and refined production, with safety-related stoppages weighing on volumes, sending the share price down 2.74% by close.
Industrials proved relatively resilient, slipping just 0.18%, while Financials eased 0.20%.
Ultimately, higher oil prices weighed on South Africa’s outlook as a net oil importer and added pressure to the local outlook despite a broadly positive market reception to the Medium-Term Budget Policy Statement earlier in the week. SK Hynix Postpones Plan to Take Solidigm Public
