Markets slip on tech, economic uncertainty

Global equity markets retreated as investors reassessed stretched valuations in high-profile technology and AI-linked names and digested cautious signals from major corporate and policy voices, according to Reuters. 

In the US, tech stocks led the pullback, with Palantir sliding despite strong earnings, while Nvidia, AMD, and Oracle also registered notable declines. The move comes as the S&P 500’s forward P/E ratio pushes above 23, its highest level since 2000, heightening concerns that the recent AI-driven rally may be overextended. Risk aversion supported the US dollar, keeping the dollar index above 100 as markets pared back expectations for near-term easing by the Federal Reserve. The probability of a 25 bps cut next month has slipped to around 69%, down from nearly 90% before the latest FOMC decision. At the same time, the ongoing US government shutdown — now the longest on record — has delayed key data releases, leaving investors to look to the upcoming ADP private payrolls report for direction.

The cautious tone extended to Europe, where the STOXX 50 and STOXX 600 each fell 0.40%. Technology names again led declines, with ASML, SAP, Adyen, and Nokia under pressure amid growing doubts that heavy AI and datacenter investment will translate into the revenue growth projected by many firms.

In Asia, mainland Chinese equities also weakened as markets evaluated the implications of the recent Sino-US trade accord, which included tariff reductions, the suspension of rare earth export controls, and the halting of mutual sector investigations. However, optimism was tempered by softer economic data, with October manufacturing prints showing a deeper-than-expected slowdown and marking a seventh consecutive month of contraction.

South African markets mirrored the global risk-off trend, with the FTSE/JSE All Share weighed down by resource and tech-linked counters. Financials were comparatively steadier, while the rand eased modestly against a firmer US dollar in line with broader emerging market currency moves. Attention now turns to key domestic data releases later in the week for further guidance on local growth momentum and the SARB’s policy trajectory.

In commodities, gold softened as dollar strength reduced safe-haven appeal, while platinum group metals saw mixed trade amid uncertain industrial demand. Brent crude declined on concerns over slowing global consumption and ample supply conditions, and iron ore continued to trend lower on cautious outlooks for Chinese steel production — providing limited support to South Africa’s resource sector.