On Wednesday, the U.S. stock market took a big hit following renewed concerns over AI spending, which pressured tech stocks, resulting in MSCI’s global equities gauge falling lower. However, the market has ticked back up as investors set their sights on a series of key central bank meetings this week that will reflect global monetary policy in 2026.
Meanwhile, geopolitical tensions are boosting the price of commodities, with silver posting a record high, gold rising for a seventh consecutive day, and oil prices extending a rebound from five-year lows.
Tech Stocks Falter as Investor Concern Over AI Bubble Resurfaces
In U.S. equities, technology stocks weighed down the S&P 500 amid the latest fears of an artificial intelligence bubble. Shares of chipmaking giant Nvidia (NVDA) closed Wednesday’s session 3.8% down. Meanwhile, Oracle’s (ORCL) shares are down 5.4% even after it reassured investors that discussions over an equity deal to support an AI data center project were on track.
Speaking to Reuters, David Bahnsen, chief investment officer at the Bahnsen Group, said that it appears that a real market fatigue has set in for the “singular” AI infrastructure narrative. The circular issue of revenue, rationalization of capex, and the fact that not all players can be winners, is being accepted by the market as a reality of the sector.
Tony Sycamore, an analyst at IG, said Oracle remained the primary source of anxiety in the market, as the latest setback related to key partner Blue Owl Capital not being involved in the data center project has deepened investor scepticism around the company’s aggressive AI infrastructure build-out.
“Worries over soaring capex, heavy debt, construction delays, OpenAI’s massive crash burn, and mixed Q2 earnings have eroded confdence, positoning Oracle as the poster child of fading AI infrastructure hype,” Sycamore said.
On Wall Street, the Dow Jones Industrial Average (DJI) fell 0.47% to 47,885 points, while the S&P 500 (SPX) fell 1.16% to 6,721 points, and the Nasdaq Composite (IXIC) fell 1.81% to 22,693. MSCI’s global stock index, MIWD00000PUS, fell 0.81% to 994.69 points.
U.S. Treasury Yields Rise as Investors Await Delayed Inflation Data, Expected to be in the 3% Range
U.S. Treasury yields were pushed higher by investors as they await Thursday’s inflation data. Traders’ sentiment is fractured as the delayed data release is showing a less clear picture of the U.S. economy, which is the result of the 43-day federal government shutdown that ran from September 1 until November 14.
The yield on the benchmark U.S. 10-year notes rose from 4.149% on Tuesday to 4.157% on Wednesday, while the 30-year bond yield rose to 4.829%. Meanwhile, the yield for 2-year notes, which typically moves in lockstep with interest rate expectations from the Federal Reserve, rose 1 basis point (bps) to 3.489%.
Central Banks of the U.K., Japan, and Europe Weigh Interest Rate Decisions This Week
On the currency front, the pound sterling fell for a second-straight day to $1.33 following an expected drop in UK inflation levels on Wednesday. This all but guaranteed a potential rate cut by the Bank of England on Thursday. Meanwhile, the dollar rose as markets await central bank decisions around the world and weighed the Fed’s commentary on the U.S. economy.
The European Central Bank is also set to deliver its policy decision on Thursday, and is widely expected leave its rates unchanged, while traders expect Japan to increase its interest rates on Friday, but are less certain about the pace of quantitative tightening next year by the Bank of Japan. The dollar index, which measures the dollar against a basket of global currencies, rose 0.2% to 98.41. The euro was down 0.06% to $1.17, while the yen weakened against the dollar.
Meanwhile, Federal Reserve governor Christopher Waller, who is being interviewed by President Trump as a candidate to replace Jerome Powell as the next Fed chairman, said the central bank had room for further rate cuts, given the signs of job market weakness. On Wednesday, Trump said that the next Fed chair would be someone who would lower the interest rates “by a lot”. The central bank has only signalled one rate cut for 2026.
Investors are expecting core inflation to be in the 3% range. With the Fed focused on the jobs market, Thursday’s inflation report may have less impact on rate expectations than the central bank otherwise might.
Oil Prices Rise as U.S. Tensions with Venezuela Heat Up, while Silver Hits ATHs and Gold Stabilizes
The price of oil edged higher after Trump ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela. This comes as Washington increases its pressure on Nicolas Maduro’s government by targeting its main source of revenue.
U.S. crude is up 1.21% to $55.94 a barrel, and the Brent settled at $59.68 per barrel, up 1.29% on Wednesday. In precious metals, silver’s price surpassed $66 an ounce for the first time in history, rising 4.2%, while spot gold rates rose 0.94% to $4,344 an ounce. U.S. gold futures rose 1.09% to $4,351.
