Global stocks slip as AI jitters, US midterms keep investors on edge

Global stocks dipped on Tuesday amid AI concerns and as US midterm elections commenced, with investors holding their breath. Analysts forecast a 77% likelihood of Democrats securing control of both chambers of Congress, which could result in stricter regulation of AI and increased corporate oversight. Alexander Lis, the chief investment officer at Social Discovery Ventures, expects populist measures against AI if the Democrats prevail, with a favorable outlook for data centers.

Big Tech's underwhelming earnings and substantial capital spending targets have unsettled Wall Street, with the election outcome receiving closer examination. The tech-heavy Nasdaq-100 index NQCv1 remained steady, while the S&P 500 contracts ESCv1 experienced a 0.14% decline. The tech-focused STOXX 600 index fell by 0.6% to 645.36 points.

The MSCI gauge of global stocks also slipped by 0.26%. The dollar index, which gauges the currency against a basket of peers, fell to 101.69, marking a one-month low. The yield on the US 10-year Treasury note rose by 1.2 basis points to 4.9064%. Apple announced lower gross margins for the crucial holiday quarter due to rising memory-chip costs, with services revenue growth falling short of Wall Street expectations.

This news intensified market pessimism, which has been dampened by tepid results from tech giants. Brent crude futures LCOc1 increased by 1.6% to $106.44 per barrel, with oil prices fluctuating throughout the week due to conflicting signals from the US and Iran regarding the end of the war in the Middle East. The US executed strikes on Iran's Qeshm Island in the Strait of Hormuz, as reported by a US official, corroborating an earlier Wall Street Journal article.

President Trump had previously hinted at a potential deal to end the conflict, and Qatari mediators were also engaged in talks with Iranian Foreign Minister Abbas Araqchi to explore a US-Iran agreement. The Chinese yuan weakened against the US dollar as the People's Bank of China announced a reserve ratio increase aimed at curbing the yuan's recent rally.

Cryptocurrencies remained volatile following last week's Binance hack, with Bitcoin down 0.1% to $76,638.66 and Ether remaining unchanged at $2,254.05.