Global equity markets climbed as renewed interest in artificial intelligence firms outweighed concerns over rising US inflation and the potential for further Federal Reserve interest rate hikes. Gains in technology shares led the recovery, signaling continued investor confidence in the sector despite ongoing macroeconomic pressures.
Technology stocks power rebound
Nasdaq 100 futures rose 1.5%, regaining losses from Tuesday that had been triggered by regulatory uncertainty. S&P 500 futures added 0.6%, supported by a strong rebound in leading tech names.
In Europe, stock index futures pointed higher. MSCI’s Asia Pacific Index advanced 1.6%, booking its strongest two-day performance in over three months, mainly on gains in technology shares.
Analysts noted that appetite for tech stocks continues to overshadow inflation concerns, with robust demand for companies operating in the AI sector pushing indices higher across major regions.
Anthropic eyes $1.5 trillion valuation
Investor enthusiasm for artificial intelligence stocks intensified following upbeat outlooks from CoreWeave and speculation about an initial public offering by Anthropic, the developer behind the Claude chatbot. Banking sources reported that, amid strong investor demand, teams working with Anthropic are considering a valuation of $1.5 trillion or higher for a potential IPO.
Reports also indicated that OpenAI’s quarterly revenue surpassed $10 billion for the first time, contributing to growing optimism about the sector’s prospects and fueling significant investment activity in AI-related stocks.
Markets expect 25 basis point Fed hike
US inflation data came in higher than expected, reinforcing market expectations that the Federal Reserve could raise rates at its next meeting. This outlook maintained selling pressure on US Treasury bonds, with two-year Treasury yields registering a 17 basis point jump on Tuesday—the sharpest daily increase in 19 months.
Money markets are now pricing in a 25 basis point rate hike by the Fed next month, with investors also weighing the probability of an even larger increase.
In commodities, oil prices rebounded after two sessions of declines, as investors gauged the likelihood of an easing in tensions between the US and Iran. Brent crude returned to levels above $92 per barrel. Meanwhile, the US dollar, which had gained 0.5% on Tuesday, edged slightly lower.
The stronger performance in Nasdaq 100 futures compared to S&P 500 futures reflects the pivotal role of technology stocks in the recent rally. Persistent selling in bond markets, combined with expectations of a Federal Reserve rate increase of at least 25 basis points, continues to shape market sentiment following the latest inflation data.
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