The DAX is expected to start the new trading week virtually unchanged. The lead from Asia is weak, with semiconductor stocks in particular coming under pressure as several of the market’s most important recent themes once again fuelled uncertainty.
In the Middle East, hopes of a swift de-escalation have suffered another setback. The US president’s rejection of a proposal aimed at easing tensions triggered an immediate rise in energy prices, reigniting inflation concerns. Oil remains the key transmission channel through which geopolitical risks feed directly into inflation, bond yields and ultimately equity markets.
At the same time, cracks are once again appearing in the previously resilient AI story. OpenAI’s announced pause in training its latest AI model is prompting investors to question whether the extraordinary pace of development seen in recent years can really be sustained. There is also growing debate within the industry over whether development needs to be deliberately slowed in order to better manage the risks of technological overheating.
Oracle is adding to the nervousness. The enormous investment required to expand AI data-centre capacity is raising doubts over whether this spending can be monetised quickly enough. This could prove decisive for the next phase of the AI boom. Investors are no longer asking only how much is being invested in artificial intelligence, but increasingly when these billions in investment will start generating corresponding returns.
