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A selloff in chipmakers rippled through global markets, triggering a rout across Asia and and a fall in European equities as investors reassessed the durability of the artificial intelligence-driven rally. |
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Wall Street futures were in the red after major North American markets closed down yesterday. TSX futures followed sentiment lower. |
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On Wall Street, markets are watching earnings from Travelers Cos. Inc. |
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“Retail investors have borrowed to trade in this really impressive AI rally, so I think the unwinding of leveraged positions will definitely exaggerate the decline as well. It will feed into the market,” said Fabien Yip, a market analyst at IG |
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Overseas, the pan-European STOXX 600 was down 0.71 per cent in morning trading. Britain’s FTSE 100 edged down 0.03 per cent, Germany’s DAX dropped 0.9 per cent and France’s CAC 40 declined 1.05 per cent. |
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In Asia, Japan’s Nikkei closed 4.03 per cent lower, while Hong Kong’s Hang Seng slid 1.78 per cent. |
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Oil prices climbed after the U.S. and Iran stepped up attacks across the Gulf, with their broken truce limiting oil flows out of the Strait of Hormuz and with Tehran asking the Houthi organization to stand ready to shut the Red Sea export route. |
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Brent crude futures rose 1.9 per cent to $85.85 a barrel. West Texas Intermediate (WTI) futures gained 2.2 per cent to $80.69 a barrel. |
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“The potential threat of the Red Sea becoming another major supply disruption point is further complicating the global oil outlook,” said Tim Waterer, chief market analyst at KCM Trade. He noted the “dual-risk scenario” was keeping a geopolitical premium embedded in both benchmarks. |
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In other commodities, spot gold was up 0.6 per cent to US$3,993.22 an ounce. U.S. gold futures for August delivery gained 0.1 per cent to US$3,996.90. |
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The Canadian dollar strengthened against its U.S. counterpart. |
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The day range on the loonie was 71.12 US cents to 71.30 US cents in early trading. The Canadian dollar was up about 0.91 per cent against the greenback over the past month. |
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The U.S. dollar index, which weighs the greenback against a group of currencies, was little changed 100.77. The dollar was pegged at $1.4030. |
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The euro slipped 0.06 per cent to US$1.1438. The British pound fell 0.3 per cent to US$1.3439. |
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In bonds, the yield on the U.S. 10-year note was last down at 4.528 per cent. |
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8:30 a.m. ET: Canada’s international securities transactions for May. |
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8:30 a.m. ET: U.S. housing starts for June. Consensus is an annualized rate jump of 13.0 per cent. |
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8:30 a.m. ET: U.S. building permits for June. The Street expects a decline of 0.7 per cent on an annualized rate basis. |
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8:30 a.m. ET: U.S. import prices for June. Consensus is a decline of 0.6 per cent from May but a rise of 6.2 per cent year-over-year. |
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9:15 a.m. ET: U.S. industrial production and capacity utilization for June. |
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10 a.m. ET: U.S. University of Michigan Consumer Sentiment for July. |
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With Reuters and The Canadian Press |
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