Finance

Investors are expressing growing anxiety over the significant capital expenditure tech corporations are allocating to artificial intelligence without delivering immediate financial returns. This structural skepticism heavily impacted companies like Alphabet and Intel, the latter experiencing a steep 7.9% drop despite issuing a strong revenue forecast. The ongoing jitters have caused the AI investment trade to lose momentum, leading to a visible rotation into more cyclical and defensive market sectors.

Global energy markets experienced a notable reprieve as Brent crude futures dropped nearly 4% to settle around $96.78 per barrel, breaking out of a dangerous multi-day surge that had previously pushed prices past the $100 threshold. The downward movement was triggered by reports indicating that China and Pakistan are trying to intermediate new peace negotiations between the United States and Iran. This price correction successfully alleviated localized pressure on government bond yields, although geopolitical dynamics in the Middle East remain fragile.

Economic indicators revealed that private sector activity in the United States continued to expand at a robust pace, with the S&P Global Flash U.S. Composite PMI climbing to 53.6 in July from 51.9 in June. This accelerating growth was predominantly spearheaded by the services sector, which was heavily boosted by strong inflows of new business volume. Analysts noted, however, that part of this surge may be temporary due to recent large-scale events like the FIFA World Cup and national anniversary celebrations.