Markets stem the selloff: AI under scrutiny amid data and Central Bank decisions

Strong guidance from Micron supports tech stocks as investors await US inflation data and policy decisions from the ECB and the Bank of England in a pivotal week for global markets.

Global markets are showing mixed signals at the start of a session packed with key macroeconomic releases and central bank meetings. On Wall Street, futures on the Nasdaq 100 are up 0.5% and those on the S&P 500 0.2%, helped largely by Micron Technology. The US memory-chip giant issued a revenue forecast above expectations, sending its shares up about 8% in after-hours trading and helping to slow the recent selloff in technology stocks.

The rebound follows a difficult session for the Nasdaq, which fell nearly 2% on Wednesday as investors questioned whether companies at the forefront of the artificial-intelligence boom can continue to justify lofty valuations and ambitious spending plans. Limited visibility on AI-driven revenues, profits and cash flows remains a key concern. According to Frank Thormann of Schroders Investment Management, enthusiasm for AI risks running ahead of the tangible economic returns it is currently delivering.

In Europe, futures are broadly flat, while Asian markets are trading lower. In bond markets, the combination of the tech selloff and dovish comments from a Federal Reserve official has supported Treasuries, with the yield on the US two-year note falling to 3.47%, underscoring the appeal of government bonds as safe-haven assets.

Investors’ focus is now firmly on the release of US inflation data for November, which could offer clues on the future path of interest rates. However, the CPI report is expected to provide only a partial snapshot of inflation due to data-collection disruptions linked to the government shutdown. At the same time, the European Central Bank is widely expected to keep interest rates unchanged, while the Bank of England may deliver a pre-Christmas rate cut to support a weakening economy. In Japan, expectations are building that the Bank of Japan could tighten policy, potentially lifting rates to their highest level in three decades.

In commodities, Brent crude trims earlier gains, gold remains steady and the dollar is little changed, as caution prevails among investors navigating a critical phase for global financial markets.

Andrea Pelucchi