Markets continued to see sell-offs for the fourth consecutive session due to investors’ anxiety over soaring AI companies’ valuations and the instability of the artificial intelligence boom. Sundar Pichai, CEO of Google parent company Alphabet, also warned in an interview with the BBC that “no company is going to be immune” to the impacts of the AI bubble bursting. He described the current AI investment wave as "extraordinary" while acknowledging that it has an “element of irrationality.”

US markets saw steep declines: The S&P 500 closed down 0.8%, while the Dow Jones fell 1.1%, and the tech-heavy Nasdaq shed 1.2% during yesterday’s trade. Also driving the fall is speculation over US interest rates not getting cut as “quickly as hoped,” The Guardian reports, citing commentary from policymakers. Nervousness over tech giant Nvidia’s earnings and worry around massive debt over AI infrastructure are also adding to market volatility.

Could Nvidia’s earnings offer some comfort? US chipmaker Nvidia will release its quarterly results later today. Investors will also be on the lookout for September’s US jobs report, which will see the light tomorrow after government-shutdown related delays.

Behind the numbers: “A selloff in the world’s largest technology companies drove stocks to their longest slide since August, underscoring the US market’s narrow reliance on a handful of growth giants. Wall Street has grown increasingly concerned that AI isn’t yet generating enough revenue or profits to justify the massive spending on infrastructure,” Bloomberg wrote.

MARKETS THIS MORNING-

Asian markets are mixed in early trading this morning as investors assess the fallout from the sell-off. Japan’s Nikkei, the Shanghai Composite, and the Hang Seng are all in the green, looking at moderate gains, while the Kospi is down 0.2%.

ADX

9,882

-0.3% (YTD: +4.9%)

DFM

5,899

-1.0% (YTD: +14.3%)

Nasdaq Dubai UAE20

4,715

-0.6% (YTD: +13.2%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

3.7% o/n

3.9% 1 yr

Tadawul

11,099

+0.4% (YTD: -7.8%)

EGX30

40,501

-1.4% (YTD: +36.2%)

S&P 500

6,617

-0.8% (YTD: +12.5%)

FTSE 100

9,552

-1.3% (YTD: +16.9%)

Euro Stoxx 50

5,535

-1.9% (YTD: +13.1%)

Brent crude

USD 64.56

-0.5%

Natural gas (Nymex)

USD 4.38

+0.2%

Gold

USD 4,061

-0.2%

BTC

USD 92,590

+0.4% (YTD: -1.1%)

Chimera JP Morgan UAE Bond UCITS ETF

AED 3.8

+0.3% (YTD: +9.1%)

S&P MENA Bond & Sukuk

152.03

+0.1% (YTD: +8.6%)

VIX (Volatility Index)

24.69

+10.3% (YTD: +42.3%)

THE CLOSING BELL-

The DFM fell 1% yesterday on turnover of AED 712.6 mn. The index is up 14.3% YTD.

In the green: Ekttitab Holding Company (+14.9%), Ithmaar Holding (+14.9%) and Al Firdous Holding (+14.8%).

In the red: International Financial Advisors Holding Company (-10.0%), Chimera S&P UAE Shariah ETF- Share class B - Income (-9.1%) and Al Ramz Corporation Investment and Development (-5.8%).

Over on the ADX, the index fell 0.3% on turnover of AED 1.1 bn. Meanwhile, Nasdaq Dubai was down 0.6%.

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