Equities: AI reassessment shakes global markets – Deutsche Bank

FXStreet Insights Team FXStreet

Deutsche Bank strategists highlight a sharp reassessment of the AI (Artificial intelligence) trade with semiconductor and Korean equities suffering steep monthly losses despite strong YTD gains. European stocks outperformed as sector rotation and solid Eurozone growth supported broader indices.

AI trade drives sharp equity swings

"A reassessment of the AI trade was the key theme in equities, with the Philly Semiconductor index (-20.6%) seeing its worst month since 2008 and the KOSPI slumping by -22.2% despite a late rebound, though both are still up over +50% YTD. European stocks outperformed and sectoral rotation meant that many broader indices are still within touching distance of record highs."

"Equities saw a solid gain in aggregate, with the S&P 500 advancing +1.05% (+0.70% Friday). But the standout theme was continued volatility around the AI trade, with the Philly semiconductor index ending the week -4.30% lower despite a +8.19% spike on Thursday. The Mag-7 (+4.16%) had a strong but varied week, with Microsoft (+21.75%) and Amazon (+17.00%) surging after their earnings, but Apple (-7.24%) and Meta (-6.47%) losing ground after theirs."

"Internationally, the volatility was most extreme for Korea’s KOSPI index, with a +17.91% surge on Friday still leaving the index -1.42% lower on the week after it plunged across Tuesday-Wednesday.

"A solid Eurozone Q2 real GDP print (+0.4% qoq) also helped, sending the DAX (+2.11%), CAC (+1.64%) and FTSE 100 (+1.23%) to strong advances, though the STOXX 600 (+0.73%) was weighed down by a -8.24% decline for ASML."

"S&P (+0.61%), Nasdaq (+0.96%) and Stoxx (+0.93%) futures have also rallied this morning although the ongoing tech volatility is holding back the KOSPI (-4.92%) and the Nikkei (-0.93%). The Hang Seng is flat and mainland Chinese markets are down a few tenths of a percent."

"Corporate earnings remain another major theme. In the US, reports are due from Palantir (today), SpaceX, AMD, Caterpillar, McDonald’s and Toyota (tomorrow), before attention shifts to Eli Lilly, Walt Disney and Uber (Wednesday). European highlights include Novo Nordisk and Siemens Energy (Wednesday), followed by Siemens and Rheinmetall (Thursday), while Japan’s reporting calendar includes SoftBank and Nintendo (Thursday)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD struggles above 1.1500 despite USD weakness

EUR/USD struggles with its recovery above 1.1500 in European trading on Monday, despite broad US Dollar weakness and improved risk sentiment. The USD loses traction following US President Trump's call off an attack on Iran and that talks between the two sides would happen on Monday. Traders will closely monitor the developments surrounding US-Iran negotiations and US ISM PMI data.

Gold extends range play below $4,100 as rebounding USD meets receding Fed hike bets

Gold struggles to capitalize on a modest weekly bullish gap opening, and remains below the $4,100 mark heading into the European session. The US Dollar stages a modest recovery from its lowest level since June 17, which is seen capping the upside for the commodity. The upside for the USD, however, seems limited amid renewed hopes for a US-Iran peace deal and receding US Fed rate-hike expectations.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

Solana risks a steeper decline below $70 despite steady ETF inflows

Solana (SOL) is trading in the red, losing bullish momentum and remaining capped below its 50-day Exponential Moving Average at $75.68. SOL-focused Exchange Traded Funds show resilience with a monthly inflow of $14.62 million in July, while the near-term retail support wanes with the funding rate turning negative.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.