More tech volatility has outweighed the impact of the pause in US-Iran fighting, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
Attack pause fails to sustain markets
When a calming of Middle Eastern hostilities fails to provoke a major up day in stocks, you know there is more trouble ahead. Earlier optimism around a pause in fighting did not last once the US session began, and investors took the earlier gains as a chance to cut back exposure yet further in battered tech stocks. The Nasdaq 100 fell to its lowest level since early May, hit hard by a 3% drop in Nvidia. While a lack of hostilities is good news all round, the fears hitting markets are broader than that, and in any case, there is too much event this week to go charging back into stocks.
European markets hold on, but for how long?
The resilience of European stock markets is being driven by this reversal in oil prices, and it may last a while if we keep seeing crude prices come down. But they are unlikely to remain immune if August does live up to its reputation for volatility. Mid-term Augusts aren’t always dire, but much hinges on whether this week’s cavalcade of big tech earnings (and everything else, but tech trumps all) goes the same way as Alphabet’s last week.
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