Saudi stocks decline and global markets have mixed performance amid inflation pressures and artificial intelligence

Saudi stocks ended Tuesday's trading on a decline, recording the lowest close since January 2026, under pressure from a decline in leading stocks, amid trades worth a total of about 3.6 billion riyals.

The main market index, TASI, ended Tuesday’s session, declining by 1.2 percent, to close at 10,456 points, losing 124 points, recording the lowest close since January 2026.

The value of trades amounted to about 3.6 billion riyals, while the index recorded the highest level during the session at 10,588 points, and the lowest level at 10,456 points.

With today's decline, the index's losses since the beginning of September reached more than 670 points, equivalent to about 6 percent.

“Saudi Aramco” shares fell by more than 1 percent to 25.18 riyals, while shares of “Al Rajhi Bank”, “Saudi National Bank”, “Ma’aden”, “ACWA Power”, “SABIC”, “SABIC Agricultural Nutrients”, “Alinma Bank”, and “Dr. Suleiman Al-Habib” and “PSF” with rates ranging between 1 and 3 percent.

“Abu Moati” and “East Pipe” stocks topped the list of declining stocks by 8 percent each.

On the other hand, “Knowledge City” shares led the rise by 10 percent to 22.11 riyals, recording the highest close in 5 years, amid trading of about 4.1 million shares.

Arabian Drilling shares rose by 5 percent.

Technology stocks rose in Europe, Tuesday, while Nasdaq futures rose slightly, driven by optimism about the plans of the artificial intelligence laboratory “Anthropic” to go public, overcoming concerns related to the rise in oil prices and bond yields globally.

Reuters reported that Anthropic's upcoming initial public offering could value the company at more than $2 trillion, and that it plans to spend $518 billion on cloud computing, computing capabilities, and infrastructure, which could enhance the business of artificial intelligence infrastructure companies, including semiconductor companies.

The technology sector in the European Stoxx 600 index rose 2.5 percent to its highest level in six weeks, while futures contracts linked to the Nasdaq index on Wall Street rose 0.3 percent, with shares of chip companies such as Micron and Advanced Micro Devices rising about 1 percent in transactions prior to the opening of the market.

David Morrison, chief market analyst at Trade Nation, said: “Anthropic has already overtaken OpenAI by a large margin and is largely seen as the market leader, and there is a lot of excitement about the opportunity to participate in its initial public offering.”

He added: “Historically, the technology sector has been highly scalable and not dependent on infrastructure. But this is no longer true now; “Technology has become very dependent on huge spending on infrastructure.”

Anthropic also called for more regulation of artificial intelligence, which may be a major focus when US President Donald Trump meets later Tuesday with House Speaker Mike Johnson and a number of technology executives, including Dario Amodei of Anthropic and Mark Zuckerberg of Meta.

Stock markets are trying to get rid of the pressures resulting from rising bond yields, in light of the ongoing war in the Middle East for seven months, in addition to the sharp rise in debt issuances from governments and global artificial intelligence companies. September is expected to witness one of the strongest waves of bond selling in European and US economies with high debt levels over the past few years.

French 10-year bond yields stabilized near their highest levels since 2008 at 4.74 percent, and are on track to record their largest monthly rise since 2022, while 10-year US bond yields are hovering near their highest levels in 19 years at 5.21 percent, and are on track to record their largest monthly jump since 2024.

Sovereign bond yields are an anchor for global markets, a reference price for investing in the highest-risk stocks, and a benchmark for pricing mortgage loans and corporate borrowing. High interest rates increase pressure on the budgets of governments, companies and households.

But analysts, such as John Blassar of the Swiss company CityGestion, believe that the strength of the labor market, consumer spending and capital spending on artificial intelligence may support the US economy, which may make it less sensitive to raising interest rates by the Federal Reserve.

The dollar maintains its strength

The rise in US bond yields and uncertainty about when the conflict in the Middle East will end helped the dollar maintain its stability against the euro at $1.1347, and the Japanese yen at 157.28 yen to the dollar.

The dollar index, which measures the performance of the US currency against a basket of six currencies, was heading for its first monthly rise since June.

A US report on job vacancies in August is scheduled to be released later Tuesday, as the first of a group of important US economic data this week, which will affect the course of the Federal Reserve’s monetary policy. The CME Group's Fed Watch tool showed that investors see a 68.1 percent probability of a 25 basis point rate hike in October.

Investors also followed renewed efforts by American and Iranian officials to end the conflict, at a time when Brent crude futures fell 0.9 percent to $104.3 per barrel.

In other markets, the Australian Central Bank raised interest rates to their highest level in 15 years, but the Australian currency gave up some of its initial gains after some of the governor’s statements were considered to have a monetary easing tone.

Gold prices struggled to recover from their lowest level in more than seven weeks, as rising bond yields limited the rise in non-yielding assets. In the latest trading, gold recorded $4,150.59 per ounce.

In the cryptocurrency market, Bitcoin rose 0.9 percent to $84,274.02, but it is still down about 4 percent from its highest level in more than seven months, which it recorded earlier this month.

Shares of Chinese fast fashion company Shein fell more than 11 percent in Hong Kong on Tuesday, after the company's first financial results since its listing on the stock exchange fell short of investors' expectations, in light of slowing revenue growth, declining profits, pressures from customs duties, and increasing competition in its main markets.

SheIn announced on Monday that its revenues during the first half of the year increased by only one percent, compared to the same period last year, while its operating profits fell by half.

The results led to a strong wave of selling in the stock, before it reduced some of its losses by the middle of Tuesday’s session, but it remained down 10.9 percent at 31.44 Hong Kong dollars. The results are of particular importance. It is the first since the company's prominent initial public offering on the Hong Kong Stock Exchange, this September. The offering estimated the value of Shein at about $26.3 billion, a level that is sharply lower than the valuation of close to $100 billion it obtained during private financing rounds in 2022.

Since its first day of trading in Hong Kong this month, the stock has lost more than 35 percent of its value, reflecting increasing investor doubts about the ability of the company's low-cost business model to maintain previous growth rates in a more difficult trading environment.

Shein is facing simultaneous pressures in two of its most important global markets. Its net revenues in Europe declined by 13.9 percent during the second quarter, to about $3.8 billion.

The company attributed this decline to a decrease in sales volume, after it raised prices and reduced spending on online advertising, in preparation for canceling the customs exemption that low-value shipments benefited from.

In the United States, another major market for the company, revenues fell 6 percent during the period from April to June, a reflection of the impact of tariffs on its business.

These developments increase pressure on the Shein model, which relied largely on a flexible supply network, low prices, intensive digital marketing, and shipping products directly to consumers.

Customs changes and rising international trade costs have become a challenge to this model, at a time when the company faces strong competition from low-cost e-commerce platforms such as “Temo” and “Ali Express”.

Catherine Lim, an analyst at Bloomberg Intelligence, said that the accelerating decline in operating profits raises doubts about the size of the possible recovery in 2027, even with the possibility of a decrease in shipping burdens and the company’s efforts to expand into higher-priced brands.

She added that the administration plans to bear the costs of shipping and customs duties, instead of passing them entirely to the consumer by raising prices, with the aim of protecting the company's competitive position.

However, increased reliance on storing products locally in Europe may in turn lead to higher logistics costs in the short term.

In addition to financial pressures, Shein continues to face scrutiny over its environmental impact and accusations of human rights violations, factors that have added regulatory and reputational challenges to the escalating business competition.

The first results after the listing put the company to an early test in the public markets, as investors are watching its ability to protect profit margins with rising tariff and shipping costs, while at the same time maintaining the low prices that formed one of the most important elements of its global expansion.