Report by Singular Bank
European stock markets closed lower. The Euro Stoxx 50 fell by around 1.2%, and the IBEX 35 slipped by approximately 0.2% – a somewhat smaller decline following yesterday’s largely technical correction.
The focus of the session was on profit-taking within the artificial intelligence sector. Samsung reported strong profit growth but failed to meet very high expectations, which dragged down semiconductor stocks and AI-related suppliers in Europe and the United States.
On Wall Street, the mood was weaker in the technology sector: the Nasdaq fell by nearly 1.2 per cent and the S&P 500 by around 0.7 per cent at the close of European trading.
The session was marked by two key developments. On the one hand, a correction in AI-related shares following the negative reaction to Samsung’s results. On the other, a rebound in oil prices after fresh attacks on ships near the Strait of Hormuz, which have restored some geopolitical premium to crude.
In Europe, ASML and other semiconductor stocks were hit by profit-taking in the technology sector. By contrast, more defensive sectors, energy and some consumer companies have shown greater resilience.
This movement should not be interpreted as a shift away from the AI theme, but rather as a phase of greater scrutiny. The market remains interested in technology infrastructure, but is quicker to penalise any sign that expectations were already too high.
Bond yields rose in Europe and the United States. This movement is driven by a combination of higher oil prices, increased geopolitical tension in the Strait of Hormuz and expectations of further debt issuance in Germany to finance its budgetary plans.
The yield on the 10-year German Bund rose by 5 basis points to levels close to 2.99 per cent. In Spain, the yield on the 10-year bond rose by 5 basis points to 3.47 per cent. In the United States, the yield on the 10-year Treasury stood at 4.52 per cent, up by nearly 5 basis points.
Brent crude rose to almost $74 per barrel following further attacks on ships near the Strait of Hormuz. This move recovers part of the geopolitical premium, although it remains far from the levels seen during periods of heightened tension.
