S&P 500: Tech mood improves with AI and energy repricing – Deutsche Bank

Jim Reid at Deutsche Bank notes that an early global equity sell-off tied to AI concerns, higher Oil prices and French sovereign worries reversed as US trading progressed, lifting the S&P 500. Tech sentiment improved with strong SpaceX results and anticipation of Meta’s earnings, while tech-heavy indices still underperformed but recovered significantly from deeper intraday losses.

US session reverses early equity selloff

"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."

"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.)