Trading Day: Oil slump no cure for AI angst

Oil prices dropped on Monday, as optimism grew that US-Iran peace talks could take place soon, sending bond yields lower worldwide. Stock markets in Asia and Europe mostly benefited from the dip, yet the strength faded in US hours as investors turned their attention to the upcoming midterm elections. In this piece, I examine the potential impact of an AI-driven stock market decline on economic growth, which could differ across nations.

Various factors, including negative wealth effects and reduced AI capex, might raise concerns about recession in developed economies. Investors are also pondering the outcome of Congress control for spending and the future of AI.