New York (AFP) – World stock indexes struggled for inspiration Friday as investors remained cautious after heavy selling of companies seen vulnerable to AI deployment and concerns about tech sector valuations more broadly. A lower-than-expected US consumer inflation reading meanwhile modestly improved the outlook for Federal Reserve interest rate cuts “as investors increasingly envision a trio of rate cuts by year-end,” said a note from Interactive Brokers economist Jose Torres.
“But it’s been a bumpy ride for equities today, as bulls and bears wrestle with the tailwinds of monetary policy accommodation prospects against the backdrop of a crumbling AI narrative,” Torres added. The broad-based S&P 500 eked out a 0.1 percent gain following a choppy session. US equities struggled for momentum a day after major indices lost more than one percent. Most of the large companies in the so-called “Magnificent Seven” fell Friday, with Apple and Nvidia both shedding more than two percent.
In Europe, Paris dropped 0.4 percent at the close, with L’Oreal shares falling four percent after the cosmetics giant posted sales below analyst expectations, fueling fears of weakness for its luxury brands and performance in the key Chinese market. London’s FTSE 100 ended up 0.4 percent and the DAX advanced 0.25 percent in Frankfurt. Amid growing concerns over the massive investments by AI heavyweights, investors also worry that software, logistics, and even real estate companies will see their operations upended by artificial intelligence advances.
“The concerns that have revolved around AI disruption in the software segment have spread,” noted Joshua Mahony, chief market analyst at Scope Markets. A sense of calm had descended on trading floors early in the week after recent asset-wide volatility, helped by forecast-busting US jobs figures. However, growing concern about the hundreds of billions spent on AI infrastructure — and the bundles more announced in the past few days — have fanned speculation about when, if ever, companies will see a return.
The release of new tools this month that can perform crucial tasks in a range of fields, including legal, sales, and marketing, has meanwhile compounded those jitters — hammering companies worried about competition. “The AI scare trade has shocked investors in 2026 and has brought a significant amount of market dislocation,” said Kathleen Brooks, research director at XTB.
– Key figures at around 2115 GMT –
New York – Dow: UP 0.1 percent at 49,500.93 (close)
New York – S&P 500: UP 0.1 percent at 6,836.17 (close)
New York – Nasdaq: DOWN 0.2 percent at 22,546.67 (close)
London – FTSE 100: UP 0.4 percent at 10,449.91 (close)
Paris – CAC 40: DOWN 0.4 percent at 8,311.74 (close)
Frankfurt – DAX: UP 0.3 percent at 24,914.88 (close)
Tokyo – Nikkei 225: DOWN 1.2 percent at 56,941.97 (close)
Hong Kong – Hang Seng Index: DOWN 1.7 percent at 26,567.12 (close)
Shanghai – Composite: DOWN 1.3 percent at 4,082.07 (close)
Euro/dollar: UP at $1.1876 from $1.1871 on Thursday
Pound/dollar: UP at $1.3654 from $1.3622
Dollar/yen: DOWN at 152.71 yen from 152.74 yen
Euro/pound: DOWN at 86.96 pence from 87.14 pence
Brent North Sea Crude: UP 0.3 percent at $67.75 per barrel
West Texas Intermediate: UP 0.1 percent at $62.89 per barrel
© 2024 AFP
