Stock markets diverge, oil prices steady tracking Trump and AI

On Thursday, stock markets diverged as traders grappled with President Donald Trump's shocking midterm election loss and lingering anxieties over massive AI investments, according to Reuters. The Frankfurt DAX index achieved a new record high, while London's FTSE 100 neared an all-time peak following Democrats' decisive victory over Trump's Republicans, fueling investor optimism.

However, tech-heavy Asian markets, particularly Seoul, which had become a symbol of the AI-led surge in the first half of 2026, experienced a significant drop of over five percent.

Oil prices stabilized after plummeting by up to 10 percent on Wednesday, as hopes for progress in ending the US-Iran conflict intensified with the Democrats' electoral triumph and increased pressure for a diplomatic resolution. Susannah Streeter, chief investment strategist at Wealth Club, attributed the easing of oil prices to the release of pent-up concerns about potential escalation in the Middle East war.

However, she cautioned that sentiment around AI investments remained fragile due to an anticipated slowdown in data center construction, which could negatively impact major technology sector players.

Streeter further predicted that a similar trend would unfold on Wall Street, with the S&P 500 building on Wednesday's rally, albeit with tech stocks facing pressure on the Nasdaq. Meanwhile, the British pound remained largely unchanged ahead of a Bank of England meeting where policymakers were expected to hike the benchmark interest rate for the first time in over three years, given the persistent inflation.

Meanwhile, Air France-KLM shares surged more than 12 percent following the airline's better-than-expected third-quarter operating profit, despite soaring jet fuel costs. In contrast, Rheinmetall, a German defense firm, fell nearly 16 percent after Berlin canceled a major warship contract, prompting a second earnings outlook downgrade in recent months.