## Global Markets Update: AI Concerns Weigh on US Stocks, Oil Prices Surge on Iran Tension
US Markets Close Lower on AI Concerns
US markets ended Thursday in the red as investors grappled with the implications of rising AI-related costs highlighted by tech giants Microsoft and Meta. Despite exceeding earnings estimates, shares of both companies slipped, casting a shadow over the optimism surrounding megacap stocks that have driven the market’s rally this year.
However, the after-hours trading session brought some positive news. Amazon and Apple both reported strong quarterly results, fueled by growth in cloud services and iPhone sales, respectively. These positive earnings reports offer a glimmer of hope amidst the broader concerns about AI costs.
Economic Data Mixed
Economic data released on Thursday provided a mixed picture of the US economy. Initial jobless claims fell by 12,000 to 216,000 for the week ending October 26th, suggesting a healthy labor market. On the other hand, the personal consumption expenditure price index, a key inflation gauge, rose by 0.2% in September, indicating persistent inflationary pressures.
Sector Performance
The S&P 500 sectors experienced a mixed performance, with information technology, consumer discretionary, and real estate leading the declines. In contrast, utilities and energy stocks closed higher.
Dow Jones, S&P 500, and Nasdaq Close Lower
The major US indices closed lower, reflecting the overall market sentiment. The Dow Jones Industrial Average dipped 0.90% to close at 41,763.46, the S&P 500 declined 1.86% to 5,705.45, and the Nasdaq Composite fell 2.76% to finish at 18,095.15.
Asia Markets Mixed
Asia markets traded mixed on Friday, with Japan’s Nikkei 225 experiencing the most significant losses, closing down 2.79% at 38,009.50. Australia’s S&P/ASX 200 also declined, ending the day at 8,118.80, down 0.50%. India markets were closed for the Diwali Holiday. China’s Shanghai Composite fell 0.22% to close at 3,272.57, while the Shenzhen CSI 300 slid 0.03%, finishing at 3,890.90. Hong Kong’s Hang Seng bucked the trend, gaining 0.93% and closing at 20,506.43.
Europe Sees Gains
As of 06:00 AM ET, the European STOXX 50 index was up 0.59%. Germany’s DAX gained 0.56%, France’s CAC rose 0.52%, and U.K.’s FTSE 100 index traded higher by 0.56%.
Oil Prices Surge on Iran Tension
Crude Oil prices soared over 2% in early trading, with WTI trading at $71.08/bbl and Brent at $74.56/bbl. The surge was driven by reports of Iran preparing a retaliatory strike on Israel from Iraq. This geopolitical tension fueled concerns about potential disruptions to oil supplies.
Additionally, expectations that OPEC+ might delay planned production hikes further supported the price increase.
Other Commodities
Natural Gas rose 0.07% at $2.792. Precious metals also saw gains, with Gold trading higher by 0.34% at $2,758.65, Silver gaining 0.41% to $32.935, and Copper rising 0.60% to $4.3660.
US Futures Point to a Potential Rebound
As of 06:00 AM ET, Dow futures were up 0.27%, S&P 500 futures gained 0.35%, and Nasdaq 100 Futures rose 0.40%. These positive futures movements suggest a potential rebound in US markets during Friday’s trading session.
Dollar Strengthens Ahead of Jobs Data
The US dollar index rose 0.16% to 104.15, strengthening after its strongest month in two years. Investors are awaiting the release of US jobs data, which is expected to provide further insights into the health of the US economy.
The yen softened, giving up recent gains, ahead of Japan’s three-day weekend and key risk events.
