Stocks Slide as AI Slowdown Fears Hit Sentiment – Europe Market Wrap

Global equities fell as concerns over a potential slowdown in AI development weighed on sentiment. Nasdaq 100 futures dropped 1.6%, while an ETF tracking major chip stocks fell 4.6% as traders reassessed expectations for AI-related capital spending.

Asian markets were also under pressure, with South Korea’s Kospi down 3.3% and S&P 500 futures falling 0.7%. SoftBank slid the most in nearly three months, while broader Tech shares weakened.

Oil added to the risk-off tone after renewed Middle East supply concerns. Brent jumped 2.6% to above $107 a barrel after Saudi Arabia shut its East-West pipeline as a precaution following attacks. The Dollar rose 0.4%, while markets priced nearly a 90% chance of a Fed rate hike on Wednesday.

European stocks slipped, with the Stoxx 600 down 0.1%. Higher oil and gas prices worsened the inflation outlook, pushing the UK 2-year gilt yield up 6 bps to 4.87%, while the euro traded near a one-month low against the Dollar.

ECB officials also kept a hawkish tone, with Kazimir saying rates could rise further if necessary. Markets are leaning toward another two ECB hikes by December after policymakers raised rates for a second time since the start of the Iran conflict.