Global stock markets came under new pressure on Tuesday, with renewed concerns about the artificial intelligence sector, at a time when American voters began casting their votes in the midterm congressional elections, with investors awaiting the repercussions of their results on regulatory policies and the American economy.
Traders' bets on the PolyMarket platform showed a probability of about 77 percent for Democrats to win a majority of seats in both houses of Congress, a scenario that could open the door to tightening oversight of the artificial intelligence sector and increasing regulatory restrictions on companies.
Alexander Lees, chief investment officer at Social Discovery Ventures, said that a Democratic victory in both chambers may push the adoption of populist measures targeting the artificial intelligence sector, adding that this may reinforce criticism directed at data centers.
These developments come at a time when investors' fears on Wall Street have increased in recent days, due to the tepid results of major technology companies, in addition to the high capital spending targets they announced, which made the markets more sensitive to the election results.
In trading, futures contracts linked to the Nasdaq 100 index, which is heavy on technology stocks, were largely stable, while futures contracts for the Standard & Poor's 500 index fell by 0.14 percent, after the two indices recorded losses for the third session in a row, on Monday.
In Europe, the European Stoxx 600 index fell by 0.6 percent to 645.36 points, while the South Korean Kospi index and the Taiwan index fell by 3.6 percent each, recording sharp losses.
The MSCI World Stock Index also fell by 0.26 percent.
In the currency and fixed income markets, the dollar index, which measures the performance of the US currency against a basket of major currencies, fell to 101.69 points, after recording its lowest level in a month on Monday.
In contrast, the yield on ten-year US Treasury bonds rose by 1.2 basis points to 4.9064 percent.
Steve Englander, co-head of foreign exchange research at Standard Chartered Bank, said that a Republican win in both chambers could push bond yields and the dollar higher.
Apple's expectations increase technology pressures
In the technology sector, Apple's disappointing forecasts increased pressure on the markets, after the company on Monday expected a decline in its gross profit margins during the holiday quarter, citing rising costs of memory chips, and its expectations for services sector revenue growth fell short of Wall Street's estimates by a wide margin.
These expectations deepened concerns in markets, which were already affected by lower-than-expected results for a number of major technology companies.
In energy markets, Brent crude futures rose by 1.6 percent to $106.44 per barrel, amid sharp price fluctuations this week, due to conflicting signals issued by Washington and Tehran regarding the chances of ending the war in the Middle East.
An American official told Reuters on Monday that the United States had carried out strikes on the Iranian island of Qeshm in the Strait of Hormuz, confirming a previous report published by the Wall Street Journal.
This came hours after US President Donald Trump said that reaching an agreement to end the war “may happen,” while Qatari mediators went to Tehran to hold talks with Iranian Foreign Minister Abbas Araqchi regarding a possible agreement between the United States and Iran.
Alexander Lees said that he does not believe that developments related to Iran provide a sufficient basis for building a confident investment vision at the present time, adding that investors should adopt a similar degree of caution.
In Asian currency markets, the Chinese yuan fell against the dollar, after the People's Bank of China announced its intention to raise the mandatory foreign exchange reserve ratio, in a move aimed at limiting the continued rise of the Chinese currency.
As for cryptocurrencies, they continued their volatile movements following the hack that occurred on the Binance platform last week. Bitcoin fell by 0.1 percent to $76,638.66, while Ether settled at $2,254.05.
Inflation in Türkiye returned to its upward trajectory last October, exceeding previous expectations under pressure from rising energy and food prices and geopolitical fluctuations.
Annual inflation in consumer prices in October recorded a monthly increase of 2.58 percent, and annual inflation rose to 29.77 percent, according to official figures announced by the Turkish Statistical Institute on Tuesday.
The producer price index rose 27.41 percent year on year in October.
Previous experts had expected consumer prices to rise by an average of 2.20 percent in October on a monthly basis, and annual inflation to decline to 29.28 percent.
Expert estimates of the monthly increase in October ranged between 1.25 and 2.70 percent, with annual inflation declining by 0.45 percent.
Economists' average inflation expectations by the end of this year reached 29.64 percent.
Annual inflation in consumer prices in Turkey last September recorded its largest decline in about 5 years, recording 29.73 percent, falling to less than 30 percent since November 2021, while monthly inflation recorded an increase of 1.48 percent, unchanged from the previous August. Annual inflation was 31.51 percent in August.
Fundamental factors
Turkish Statistical Institute data indicated that among the three main spending groups with the greatest weight, the prices of food and non-alcoholic beverages rose by 27.73 percent, transportation by 36.39 percent, and housing, water, electricity, gas and other fuels by 40.24 percent on an annual basis.
The contribution of these groups to the annual change was 6.81 percent for food and non-alcoholic beverages, 6.10 percent for transportation, and 4.71 percent for housing, water, electricity, gas, and other fuels.
On a monthly basis, there was an increase of 3.50 percent in food and non-alcoholic beverages, 2.02 percent in transportation, and 2.84 percent in housing, water, electricity, gas, and other types of fuel. The contribution of these groups to the monthly change was 0.84 percent for food and non-alcoholic beverages, 0.36 percent for transportation, and 0.34 percent for housing.
Of the 174 subcategories included in the index, as of October, 29 categories showed a decrease in their index, while 11 categories saw no change, and 134 categories saw an increase.
Based on inflation data in October, the annual increase in rents for the current month of October was set at 31.23 percent for homes and workplaces.
Contrary to the official figures issued by the Turkish Statistical Institute, the Inflation Research Group (INAG), composed of economists, academics and independent experts, announced that monthly inflation in October rose by 2.68 percent, and annual inflation to 45.12 percent.
