S&P 500: AI and energy repricing lift tech sentiment – Deutsche Bank

AI concerns, higher oil prices and unease over French sovereign debt initially weighed on global equities, but the sell-off reversed as US trading progressed, taking the S&P 500 higher, according to Deutsche Bank’s Jim Reid. Strong SpaceX results and expectations ahead of Meta’s earnings helped improve sentiment towards technology stocks. Although tech-heavy indices continued to lag, they recouped much of their earlier intraday losses.

Equities recover from early sell-off as US trading progresses

"It’s been another 24 hours of uncertainty and volatility, and that’s not me talking about our household during a wet half term. In markets, what started as a widespread morning sell-off dominated by AI concerns, higher oil prices and ongoing worries over French sovereign debt turned into a more positive session as the US came in, ultimately driving the S&P 500 to close +0.28% higher as the index saw the most daily advancers since April."

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"The relief from energy that played out late in the European session meant equities rallied as investors overcame some of their earlier AI jitters. Tech-heavy indices such as the Philadelphia Semiconductor Index (-0.29%) and Nasdaq (-0.02%) still underperformed, but this was a big improvement after chip stocks had been nearly -2.5% down early on."

"Outside tech, stocks performed much better, with 403 daily advancers in the S&P 500, the most since April, while the equal-weighted version of the index rose by +1.15%."

"Today we see the first of the hyperscalers report, with Meta out after the bell. This comes as SpaceX shares surged by about +8% in after-hours trading yesterday (vs NASDAQ Futures -0.16%), as the company exceeded quarterly revenue and net income expectations amid stronger AI revenue growth."

"Those results have boosted the tech mood overnight, with Nasdaq futures up +0.75% overnight, with those on the S&P +0.30% higher."

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