European Stocks Look to Best Week Since May – Europe Market Wrap
Stocks advanced as the latest bout of AI-related jitters subsided, with European equities extending to fresh record highs while Nasdaq 100 futures rebounded 1% in holiday trading following a two-day semiconductor-led selloff. Asian stocks rallied around 2%, led by rebounds in South Korean chipmakers Samsung Electronics and SK Hynix, while Europe’s utilities and technology sectors outperformed, putting the Stoxx 600 on track for a second consecutive record close.
The rebound marks another swing in what has been a volatile stretch for markets as investors debate whether the AI-driven rally has run ahead of fundamentals. Attention is now turning to the upcoming earnings season, which is expected to provide the next major test of whether companies’ heavy spending on AI infrastructure is translating into stronger profits.
Gold climbed 1.3% to its highest level in nearly two weeks, approaching $4,180/oz, after money markets further reduced expectations for Fed rate hikes this year. Lower interest rate expectations also weighed on the Dollar, making the non-yielding precious metal more attractive.
The Dollar fell to a two-week low and headed for its worst weekly performance since May as expectations for easier Fed policy increased. Meanwhile, the Yen swung between gains and losses amid speculation Japanese authorities may become less predictable in the timing and execution of FX intervention.
Brent crude steadied below $72/bbl as traders weighed the prospect of increased oil flows through the Strait of Hormuz against ongoing US-Iran talks, leaving the oil market caught between improving near-term supply and broader geopolitical uncertainty.
