Written by: Ahmed Abdel Salam
Global markets experienced a state of fluctuation during the final session of a week filled with volatility, as the sharp decline in AI-related technology stocks began to lose momentum, providing a degree of relative relief to investors. However, new spikes in oil prices prevented a full market recovery, keeping caution dominant in trading.
The impact of oil prices on economic forecasts
The continued rise in oil prices has contributed to complicating inflation outlooks, with Brent crude reaching its highest levels since the beginning of May. West Texas Intermediate (WTI) also rose by 1.8% to reach $101.25 per barrel, placing additional pressure on the global economic landscape and increasing the likelihood of persistent inflationary pressures.
Performance of technology stocks and global markets
Regarding US indices, Nasdaq 100 futures fell by 0.1%, while S&P 500 futures declined by 0.3%. While some exchange-traded funds (ETFs) tracking chip manufacturers saw slight gains, Meta Platforms continued to record losses, while SpaceX rose following details of its plans to become a mobile phone service operator.
Bond, gold, and currency movements
US Treasury bond yields partially retreated from the previous session's gains, with the 10-year bond yield rising by four basis points to reach 4.99%. In the currency market, the dollar index recorded a slight increase of 0.1%, while the euro and the British pound declined against the dollar. As for the cryptocurrency market, Bitcoin recorded a 0.5% increase to reach $81,557.
Risk outlook and future policies
Analysts believe that the risk-off sentiment may continue until November, especially as investors evaluate the sustainability of massive spending on developing artificial intelligence technologies. Concerns also arise regarding potential political changes and their impact on tax levels and regulations, which could affect earnings growth in the coming period.
