Global markets showed mixed performance as concerns over the massive funding requirements of artificial intelligence (AI) weighed on investor confidence. Wall Street futures were positive, following a sharp decline in major U.S. markets on Friday, driven by renewed pressure on tech stocks. Meanwhile, TSX futures pointed lower as investors awaited September inflation data later in the morning.
Economist My Bui from fund manager AMP highlighted investor worries that AI revenues may not be sufficient to offset the substantial upfront investments. Additionally, AI infrastructure could depreciate over time, significantly reducing book value. Rising government bond yields and wider corporate credit spreads are further increasing financing costs, making it challenging to sustain AI infrastructure development.
Overseas, European markets were down, with the pan-European STOXX 600 falling 0.79 per cent. Britain’s FTSE 100 dropped 0.88 per cent, Germany’s DAX declined 1.11 per cent, and France’s CAC 40 fell 1.35 per cent. In Asia, Japan’s Nikkei closed 0.62 per cent lower, while Hong Kong’s Hang Seng climbed 0.52 per cent.
Commodities saw mixed movements, with oil prices slipping from a five-month high after U.S. President Donald Trump waived sanctions and tariffs on Russia, potentially increasing Russian fuel exports. Brent crude futures fell 1.37 per cent to US$108.40 a barrel, while West Texas Intermediate crude (WTI) traded at US$100.90 a barrel, down 0.55 per cent. Priyanka Sachdeva, head of market insight at Phillip Nova, described Trump’s move as a desperate attempt to control oil prices ahead of the U.S. midterm elections.
In other commodities, spot gold rose 0.2 per cent to US$4,171.65 an ounce, while U.S. gold futures for December delivery gained 0.26 per cent to US$4,191.90. The Canadian dollar strengthened against the U.S. dollar, trading at $1.4097 per US$1. The U.S. dollar index advanced 0.09 per cent to 101.93, while the euro declined 0.29 per cent to US$1.1208 and the British pound slipped 0.04 per cent to US$1.3324. The yield on the U.S. 10-year note remained flat at 5.085 per cent.
Economic data releases included China’s third-quarter GDP, which showed a 4.5-per-cent pace, beating consensus forecasts. Analysts expect Beijing to meet its 2026 target of 4.5-5.0 per cent without additional stimulus. Later in the day, Canada’s consumer price index for September was expected to show a monthly rise of 0.2 per cent, or 3.2 per cent year over year, accelerating from August’s 3.0 per cent.