A preview of the upcoming day in European and global markets by Tom Westbrook reveals a shift from the exceptionalism that propelled Wall Street to record highs on the strength of America's technology giants. The sudden vulnerability of these firms, particularly evidenced by Chinese startup DeepSeek's impact on Nvidia's market value, hints at a potential reevaluation of the dominance of U.S. technology in AI.
The repercussions of DeepSeek's AI model challenging U.S. AI performance with reduced data and computing power led to a market unraveling across various industries tied to AI. Despite this turmoil, Europe's markets, notably in London and the continent, managed to avoid the worst of the fallout due to the absence of major technology companies.
In Europe, attention is on companies such as SAP, ASML, LVMH, and Christian Dior, with a focus on SAP's positive earnings and cloud growth projections reliant on AI. ASML, facing continued selling pressure post a 7% drop, and French consumer confidence reports, along with results from LVMH and Christian Dior, are key points on the agenda.
Market movements in Asia, particularly around Nvidia's suppliers, Advantest and Furukawa Electric, reflect the broader unease in tech stocks. Awaiting earnings reports from Boeing, General Motors, and Starbucks in the U.S., investors brace for Meta, Microsoft, and Tesla's reports midweek, which could impact AI spending plans.
Policy meetings in the U.S. and Europe later in the week, influenced by market volatility, are expected to lead to a rate cut in Europe and potential Federal Reserve easing. Key events shaping Tuesday include earnings reports from SAP, Dior, LVMH, Boeing, Starbucks, Lockheed Martin, and General Motors, alongside economic indicators like French consumer confidence and the ECB bank lending survey.