Deutsche Bank’s Early Morning Reid note reports that US equities have broken a nine-day winning streak as higher Oil prices, hawkish Fed pricing and negative AI news hit risk sentiment. The S&P 500 and NASDAQ both fell, with the Magnificent 7 underperforming, while Asian indices and Bitcoin also declined, reflecting broader risk-off positioning across global equities.

AI disappointment triggers equity pullback

"Nevertheless, even as the geopolitical news looks more positive, equities have taken a hit this morning after Broadcom’s forecast for AI chip revenue was beneath estimates, which pushed their share price down over -13% in overnight trading."

"That combination of negative geopolitical headlines and more hawkish rates pricing meant US equities finally stumbled after a long run of gains. So the S&P 500 (-0.74%) and the NASDAQ (-0.89%) both fell back after 9 consecutive moves higher. The declines were fairly broad, with the equal-weighted S&P 500 (-0.42%) also seeing a decent pull back."

"But it was the Magnificent 7 (-1.25%) that saw a particular underperformance, dragging US equities more broadly, even as the Philly Semiconductor index (+1.39%) reached another record high."

"Over in Europe, there were more broad-based equity declines, with the STOXX 600 (-0.66%) falling back, alongside losses for the DAX (-1.31%), the CAC 40 (-0.71%) and the FTSE MIB (-1.07%)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)