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AI fears persist

US equities had a cautious start to the week, with the Dow Jones Industrial Average ending almost unchanged after a recent record, while the technology-heavy Nasdaq fell amid ongoing concerns about high valuations in artificial intelligence-related stocks. Market participants are now looking to delayed US labour market data for October and November due this afternoon and key inflation figures on Thursday, which will inform expectations for future Federal Reserve policy after the central bank cut interest rates at its last meeting of the year last Wednesday.

  • Date
  • Auteur Alessandro Fezzi, Content & Publications
  • Temps de lecture 5 minutes

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Stocks on Wall Street showed a mixed performance on Monday with the industrial-heavy Dow Jones Industrial Average finishing virtually unchanged after touching a record high on Friday. The technology-focused Nasdaq Composite retreated about 0.6% and the Nasdaq 100 extended recent losses with a decline of 0.5% as ongoing worries about stretched valuations in AI-related stocks prompted investors to take profits ahead of year-end and shift capital from technology shares into more traditional industrial names, leaving the broad S&P 500 slightly lower as well. Among individual stocks, Tesla advanced 3.5% and moved closer to its record high, while software company Adobe, chipmaker Texas Instruments and household-robot producer iRobot came under pressure, with iRobot tumbling almost 73% after filing for Chapter 11 bankruptcy protection and announcing a planned takeover by its Chinese main supplier.

Asia stocks slide on AI tech rout

Asia-Pacific equities broadly declined on Tuesday as investors followed Wall Street’s move out of large US artificial intelligence names, with software group Oracle and chip designer Broadcom falling more than 5% and 2%, respectively, on Monday. South Korea’s Kospi dropped about 2.2%, leading regional losses alongside a 2.4% fall in the small-cap Kosdaq, while Hong Kong’s Hang Seng index slipped roughly 1.9% and mainland China’s CSI 300 lost about 1.2%. Japan’s Nikkei 225 fell around 1.3% and the broader Topix shed about 1.5%, as flash composite purchasing managers indices pointed to softer private-sector expansion in both Japan and Australia in December, with readings easing to 51.5 and 51.1, respectively from above 52 points previously. Australia’s S&P/ASX 200 finished about 0.4% lower after earlier gains.

European stocks gain at the start of the week

Equity markets in Europe traded higher on Monday, with the Stoxx Europe 600 closing up 0.74% and most indices also ending in positive territory. The European Central Bank (ECB) is widely expected to leave its key rate at 2% at its policy meeting on Thursday, while ECB President Christine Lagarde signalled to the Financial Times that growth projections could be revised higher after the central bank lifted its GDP forecast to 1.2% in September. Other central banks, including the Bank of England, Sweden’s Riksbank and Norway’s Norges Bank, are also set to deliver their final decisions of the year this week, with the Bank of England seen edging rates lower. Defence stocks retreated after Ukrainian President Zelenskyy indicated a willingness to abandon a long-term NATO membership goal.

Swiss growth outlook improves slightly

Economic researchers at ETH Zurich’s KOF institute raised their forecast for Swiss GDP growth in 2026 to 1.1% from 0.9%, supported by the customs agreement with the US that will cut average tariffs on Swiss exports to 15% from 39%. However, the institute expects growth to remain well below the estimated long-term average of 1.8% due to a weaker global backdrop. For 2025, KOF forecasts gross domestic product growth of 1.4%, unchanged from previous estimates. The Swiss Market Index (SMI) gained 1.16% on Monday. 

Corporate and economic calendar

Corporate data in focus: There is no major corporate news scheduled today.

Economic data in focus: UK unemployment rate (08:00), French Purchasing Managers’ Index (09:15), German Purchasing Managers’ Index (09:30), Euro-area Purchasing Managers’ Index (10:00), UK Purchasing Managers’ Index (10:30), German ZEW Indicator of Economic Sentiment (11:00), Euro-area ZEW Indicator of Economic Sentiment (11:00), Bundesbank monthly report (12:00), US retail sales, US nonfarm payrolls and unemployment rate, US building permits (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.