Brent Drops to $84 as AI-Capex Fears Hit Tech and Lift Euro
Updated
Updated · CaixaBank Research · Jul 29
Brent Drops to $84 as AI-Capex Fears Hit Tech and Lift Euro
3 articles · Updated · CaixaBank Research · Jul 29
Summary
$84 Brent crude and easing geopolitical risk pulled inflation expectations and sovereign yields lower on both sides of the Atlantic, leaving broader markets mixed rather than uniformly weaker.
AI-exposed tech stocks fell sharply as doubts about returns on heavy AI spending deepened and were compounded by China's chipmaking advances.
Asian equities took the heaviest losses, while Europe eked out modest gains on lower tech exposure; in the U.S., the Nasdaq fell as the S&P 500 edged higher on defensive strength.
Rate expectations also softened, with markets still pricing two ECB hikes and two Fed hikes overall, but only about a 33% chance of a Fed move later Wednesday.
The euro strengthened against the dollar while the yen weakened slightly ahead of Friday's Bank of Japan meeting, extending a broader rotation away from the recent oil-driven inflation trade.