Tech Drags Stocks Lower as Brent Tops $110 Again: Markets Wrap
(Bloomberg) — Technology stocks led global equity markets lower as concerns over whether the vast amount of investment in artificial intelligence will pay off resurfaced. Oil kept on rising as the Strait of Hormuz remained shut.
Tech is on the back foot after the Wall Street Journal reported that OpenAI recently failed to meet its own goals for user acquisitions and sales. The sector underperformed in Europe while a key industry gauge in Asia headed for its worst decline this month. Nasdaq 100 futures slipped 0.4%, and those for the S&P 500 were 0.2% lower.
Brent advanced for a seventh day to top $110 a barrel. The White House said President Donald Trump will address a proposal from Iran to reopen Hormuz “very soon”. Bond yields rose globally. The dollar gained against major peers apart from the yen after the Bank of Japan held interest rates in a split vote.
Tech stocks are taking a breather after a record-breaking advance in chipmakers fueled nearly 10% gains in the S&P 500 this month. Resurgent optimism about AI stood behind much of the charge, while the rest of the market lagged due to rising oil prices. The rally is facing a major test on Wednesday, with four of the Magnificent Seven hyperscalers reporting earnings.
“The single most important line item isn’t revenue or margins; it’s capex,” said Amanda Lyons, IT-sector lead and head of research at Energy Group Capital. “Any hint of slowing spend would be taken negatively for the ecosystem, but a sharp step-up would likely raise questions around returns.”
Corporate Highlights:
Barclays Plc traders struggled to capitalize on a volatile quarter with returns falling short of their US rivals. BP Plc said earnings jumped in the first quarter as the Iran war led to a surge in profits from its oil trading operation and spiraling energy prices. OpenAI recently failed to meet its own goals for new user acquisition and sales, fueling internal concerns that the company may struggle to support its astronomical spending on AI infrastructure, the Wall Street Journal reported. Novartis AG reported profit below analysts’ estimates and an unexpected sales decline as some of its best-selling medicines were hard hit by generic competition. Contemporary Amperex Technology Co. Ltd. priced its Hong Kong share placement at the bottom of a marketed range, according to terms of the deal seen by Bloomberg News. Microsoft Corp. and OpenAI have agreed to drop the software giant’s exclusive right to sell the startup’s AI models, opening the door for the ChatGPT maker to pursue deals with cloud-computing rivals like Amazon.com Inc. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 8:34 a.m. London time S&P 500 futures fell 0.2% Nasdaq 100 futures fell 0.4% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index fell 0.4% The MSCI Emerging Markets Index fell 0.7% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1697 The Japanese yen was little changed at 159.43 per dollar The offshore yuan fell 0.1% to 6.8360 per dollar The British pound fell 0.2% to $1.3510 Cryptocurrencies
Bitcoin fell 0.3% to $76,703.46 Ether fell 0.5% to $2,279.83 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.36% Germany’s 10-year yield advanced two basis points to 3.06% Britain’s 10-year yield advanced two basis points to 4.99% Commodities
Brent crude rose 3% to $111.45 a barrel Spot gold fell 1.1% to $4,632.26 an ounce This story was produced with the assistance of Bloomberg Automation.
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