Equities shrug off geopolitical risks
It is remarkable how global equity markets continue to shrug off geopolitical risks and push to fresh record highs.
Equity indices in Japan and South Korea extended their gains today, although an increasingly pronounced divergence is emerging between traditional technology stocks and the broader market.
AI demand supports technology stocks
Semiconductor and AI-related stocks were once again in strong demand after US companies CoreWeave and Super Micro Computer reported better-than-expected quarterly results after yesterday's closing bell.
Chinese equity markets, by contrast, moved lower as investors there placed greater emphasis on the risks associated with rising commodity prices.
Oil prices become a visible headwind
For Europe, the continued rise in oil prices is also becoming an increasingly visible headwind for inflation and, ultimately, consumer spending.
Investors face a choice between betting on geopolitical de-escalation and a subsequent decline in energy prices, or adopting a more cautious stance while continuing to ride the technology boom. For now, investor composure helped propel the DAX to another all-time high yesterday, highlighting the index's remarkable relative strength in the current environment.
US inflation data could reset rate expectations
Today's US consumer price data could take some of the shine off the bullish mood and bring interest-rate concerns back to the forefront.
