US Stocks Drop Due to New Examination of AI Trade – Europe Market Wrap
Stocks mirrored cautious moves across most asset classes as traders weighed whether earnings could justify further advances in the AI trade, with uncertainty swirling around the Middle East. S&P 500 futures fell 0.2%, while Nasdaq 100 contracts dropped 0.7%.
A strong earnings beat and raised sales outlook from TSMC failed to trigger fresh gains for the sector that has fueled most of this year’s stock market gains. Europe’s Stoxx 600 was down 0.5%.
Brent held above $84/bbl after the US struck Iran for a fifth straight day and hit a sanctioned oil tanker near the country’s main export terminal. Treasuries edged lower, with the 10Y yield rising 2 bps to 4.57%. The Dollar barely budged, while gold headed for its first day of losses in three.
An outlier to Thursday’s subdued trading was in Seoul, where sharp volatility in chipmaking heavyweights drove another steep decline in the Kospi. South Korean authorities announced a temporary halt to new listings of single-stock leveraged ETFs, with market participants blaming the products for intensifying swings due to the daily rebalancing flows required to maintain their promised return ratios.
After two days in which softer-than-expected inflation data saw traders dial back expectations for Fed rate hikes this year, June retail sales numbers will put the spotlight on the strength of the American consumer.
