European Stock Markets Decline Amid AI and Recession Concerns
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Dax and EuroStoxx slip further - AI and recession worries
PARIS/FRANKFURT (dpa-AFX) - The Dax slipped further in late trading on Friday. US labor market data were initially hardly a burden for the German leading index. However, it came under pressure as the US technology stock market Nasdaq continued to fall. Semiconductor company Broadcom disappointed investors with its forecast. The euphoria surrounding the booming topic of artificial intelligence (AI) also appears to be waning. The Dax recently lost 1.3 percent to 18,343 points. The Eurozone's leading index, the EuroStoxx 50, slipped 1.4 percent to 4,749 points. Robert Halver, Head of Capital Market Analysis at Baader Bank, wrote that technology shares were being critically scrutinized for substance. High valuations, in some cases astronomical sales and profits as well as skepticism about the profitability of companies with a business focus on AI are formally inviting profit-taking. Investors in Europe were infected by the negative trend on the Nasdaq. The Dax, which only includes a few tech stocks, was taken into clan custody. Recession worries also continue to play a role on the market. In the USA, the economy created fewer jobs than expected in August. The increase in employment in the two previous months was also revised downwards. As expected, the unemployment rate fell slightly, while hourly wages rose somewhat more than economists had forecast. Overall, the report was somewhat weaker than expected, commented portfolio manager Thomas Altmann from QC Partners. It shows that the US economy is cooling down more and more. The data is not a catastrophe, but it paves the way for the first US interest rate cut in September. The question that will now continue to occupy investors is the extent of the interest rate cut. A cut of as much as 0.5 percentage points still seems possible to some. It remains to be seen whether the market will place greater weight on the extent of the interest rate cuts or a slowdown in the economy./ajx/jha/
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Frankfurt shares close: Dax slips further - AI and recession worries
FRANKFURT (dpa-AFX) - The Dax slipped further on Friday under the impression of a very weak US technology sector. US labor market data were initially hardly a burden. The leading German index crossed the finish line with a discount of 1.48 percent to 18,301.90 points. Over the week as a whole, it lost 3.2 percent. The MDax of mid-sized stock market companies lost 1.23% to 25,046.52 points on Friday. After the record high of 18,990 points on Tuesday, gloomy US economic data had already triggered profit-taking in the Dax. In the meantime, the stock market barometer has lost more than a third of its almost 2,000-point recovery since the price slump at the beginning of August. Important technical support levels such as the 21-day and 50-day lines for the short and medium-term trend respectively were breached in late trading on Friday. On the New York technology stock exchange Nasdaq, the semiconductor group Broadcom disappointed investors with its forecast. The euphoria surrounding the booming topic of artificial intelligence (AI) also appears to be waning. Technology shares are being critically scrutinized for substance, wrote Robert Halver, Head of Capital Market Analysis at Baader Bank. High valuations, in some cases astronomical sales and profits as well as skepticism about the profitability of companies with a business focus on AI are formally inviting profit-taking. Investors in Europe were infected by the negative trend on the Nasdaq. The Dax, which only includes a few tech stocks, was taken into clan custody./ajx/jha/
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The DAX and EuroStoxx indices experienced further declines as investors grapple with worries about artificial intelligence and potential recession. The technology sector faced particular pressure following Nvidia's cautious outlook.
European Markets Face Downward Pressure
European stock markets continued their downward trend on Thursday, with both the German DAX and the EuroStoxx index experiencing notable declines. The DAX fell by 0.1% to 15,891 points, while the EuroStoxx dropped 0.3% to 4,269 points
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. This downturn reflects growing concerns among investors about artificial intelligence (AI) and the looming threat of a recession.Technology Sector Under Pressure
The technology sector bore the brunt of the market's anxiety, largely due to cautionary signals from industry giant Nvidia. Despite reporting strong quarterly results, Nvidia's conservative outlook for the Chinese market sparked worries about the sustainability of the AI boom
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. This sentiment rippled through the broader tech industry, contributing to the overall market decline.Recession Fears Loom Large
Investors' concerns extended beyond the tech sector, encompassing broader economic worries. The specter of a potential recession continues to cast a shadow over market sentiment. These fears are being fueled by various economic indicators and geopolitical uncertainties, prompting a more cautious approach from market participants
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Market Movers and Shakers
Among the DAX components, Siemens Energy emerged as the day's biggest loser, with its shares plummeting by 6.14%
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. This significant drop highlights the volatility and sector-specific challenges facing certain companies within the index.Investor Sentiment and Market Outlook
The current market environment reflects a complex interplay of factors influencing investor sentiment. While the AI sector has been a driving force behind recent market gains, the latest developments suggest a more nuanced outlook. Investors are reassessing the growth potential and risks associated with AI technologies, particularly in light of geopolitical considerations affecting key markets like China
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.As European markets navigate these choppy waters, analysts and investors alike are closely monitoring economic indicators, corporate earnings, and global trends. The interplay between technological advancements, economic realities, and market dynamics continues to shape the investment landscape, presenting both challenges and opportunities for market participants.
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