S&P 500: Tech rebound offsets broader weakness – Deutsche Bank

Deutsche Bank strategists reports that US equities outperformed Europe, with the S&P 500 rising even as most constituents fell. The NASDAQ and Philadelphia semiconductor index led gains as the recent AI‑related selloff stabilised. This tech‑driven optimism pushed US Treasury yields higher, with real yields driving the move and markets pricing in slightly more Federal Reserve rate hikes into mid‑2027.

AI stabilisation lifts tech and yields

"The improvement was led by tech stocks, as the NASDAQ (+1.11%) had its best day in two weeks, and the Philly semiconductor index (+1.61%) finally ended a relentless run of 8 consecutive declines. So given the concentration of tech in the broader index, that actually helped the S&P 500 (+0.41%) to post a steady gain, even as almost two-thirds of components within the index lost ground on the day."

"That AI stabilisation also pushed US Treasury yields higher, as it countered fears about an AI-related slowdown. Indeed, that was clear from the fact that higher real yields drove the bulk of the rise in Treasury yields yesterday, rather than inflation breakevens. So Treasury yields saw a consistent rise across the curve, with the 2yr yield (+6.5bps) up to 4.77%, whilst the 10yr yield (+6.6bps) rose to 5.14%."

"The AI trade has reversed back again this morning with the KOSPI (-4.39%) leading the declines, dragged down by chip heavyweight SK hynix Inc. (-5.17%), which is on track for its lowest close since April. The Nikkei 225 (-1.08%) is also being weighed down by tech. Elsewhere, the Hang Seng (-0.95%) is also falling after reopening following a holiday, while China’s CSI 300 (-0.51%) is also soft."

"Additionally, the S&P/ASX 200 (-0.40%) is also edging lower with National Australia Bank (NAB) shares sliding around -3.0% after the lender announced restructuring charges and job cuts. Meanwhile, S&P 500 futures are up marginally (+0.06%), with Nasdaq 100 futures slipping (-0.20%) along with the overnight tech retreat. Stoxx (-0.60%) futures are continuing Europe's recent declines and 10yr USTs are -2.1bps lower standing at 5.12% as we go to print."

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