US Stocks Stall as Traders Parse Mideast Signals: Markets Wrap
(Bloomberg) — A rally in US stocks is pausing after the artificial-intelligence trade fueled the S&P 500’s longest winning streak in more than a year, with investors gauging the prospects of an end to the war in the Middle East.
Futures for the US benchmark slipped less than 0.1% after an eight-day run of gains. Technology shares gave European and Asian stocks a fresh boost. Tencent Holdings Ltd. jumped 10% in Hong Kong on reports that it’s testing an AI agent.
Brent eased 1.5% after its biggest gain in about a month, trading near $93.50 a barrel. US President Donald Trump is struggling to get efforts toward an Iran peace deal back on track, leaving traders to parse mismatched statements about the likelihood of a lasting ceasefire.
Bonds also found some relief, with the yield on Treasuries falling around two basis points across the curve. Japan’s 10-year yield dropped 10 basis points after an auction drew firm demand.
Investors are juggling unprecedented euphoria around the vast economic potential of AI against the war in the Middle East that has brought about a historic disruption in oil supplies. Against this backdrop, the AI trade has fueled a narrow rally in stocks despite high crude prices and elevated yields.
“We may be approaching the point where optimism around the long-term positive impact of the AI buildout is going to crash against a wall of higher yields, higher inflation and lower growth,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management.
The dollar traded little changed. The yen was also steady around 159.70 per dollar after Japanese Finance Minister Satsuki Katayama said authorities were ready to take steps as needed in the foreign exchange market.
Corporate News:
SK Hynix Inc. plans to double its memory chip wafer capacity over the coming half-decade, a major expansion that should help ease a global shortage of an essential component of AI. Abivax SA shares plunged after cancer cases in a crucial clinical trial for an experimental bowel disease drug threw the French biotech’s future into question. UniCredit SpA has secured commitments that will take its stake in Commerzbank AG well above 30%, according to people familiar with the matter, adding momentum to its €38.6 billion ($45 billion) acquisition offer for the German rival. Alphabet Inc. unveiled plans to raise $80 billion through equity offerings, including an investment deal with Berkshire Hathaway Inc., highlighting the scale of spending tied to the race to build AI infrastructure. Anthropic PBC pulled ahead of OpenAI with its confidential IPO filing Monday, as the free-spending AI startups battle for a fundraising edge that’s set to determine who will win the ultimate battle for computing power. Hewlett Packard Enterprise Co. shares soared 28% in late trading after the company gave an outlook for annual sales that topped estimates, citing massive growth in AI-fueled demand for its servers and networking. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.9% as of 9:05 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average fell 0.1% The MSCI Asia Pacific Index rose 0.6% The MSCI Emerging Markets Index rose 0.9% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1650 The Japanese yen was little changed at 159.67 per dollar The offshore yuan was little changed at 6.7611 per dollar The British pound rose 0.1% to $1.3473 Cryptocurrencies
Bitcoin fell 2% to $69,920.32 Ether fell 1.3% to $1,977.53 Bonds
The yield on 10-year Treasuries declined two basis points to 4.43% Germany’s 10-year yield declined five basis points to 2.95% Britain’s 10-year yield declined six basis points to 4.84% Commodities
Brent crude fell 1.7% to $93.39 a barrel Spot gold rose 1.1% to $4,534.59 an ounce This story was produced with the assistance of Bloomberg Automation.
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