In contrast, the AI-driven euphoria persists across international equity markets. Led by gains in semiconductor stocks, Tokyo's benchmark Nikkei index breached the 68,000-point threshold for the first time. The next test for Wall Street's AI-fueled rally is expected to be Broadcom's quarterly results, due after the U.S. market close.
OIL PRICES RISE FOR THIRD CONSECUTIVE DAY
In the oil market, hopes faded for a breakthrough in the conflict between the U.S. and Iran, dimming prospects for a swift reopening of the Strait of Hormuz. Brent crude and U.S. WTI each rose by two percent to 98.05 and 96.08 dollars per barrel, respectively. Overnight, the U.S. military reported striking a military installation on an Iranian island in response to Iranian missile attacks.
The mounting inflationary pressure resulting from the conflict is leaving its mark on the economy. The Eurozone Purchasing Managers' Index (PMI) hit an 18-month low of 48.5 points in May. The ISM index and private employment data from the U.S. are expected later this afternoon.
FASHION RETAILERS ON THE RISE - COLLAPSED TAKEOVER WEIGHS ON AKZO
Negative news emerged from the Swiss financial sector: shares in asset manager Partners Group plunged 17 percent, on track for their largest single-day loss in company history, after the firm restricted redemptions from a multi-billion dollar private equity fund. The European financial services sector < .SXFP recorded the steepest industry losses, falling 1.7 percent. In U.S. pre-market trading, shares of private equity firms such as KKR, Blackstone, and Carlyle came under pressure. Investors fear that private credit and buyout firms are overly exposed to mid-sized companies vulnerable to disruption from emerging AI models.
Fading takeover hopes hit AkzoNobel hard. Shares plummeted approximately 19 percent after rivals Nippon Paint and Sherwin-Williams abandoned their pursuit of the Dutch paints and coatings manufacturer.
Zara parent Inditex impressed investors with a strong start to the summer season. Currency-adjusted sales rose 11.5 percent in May, surpassing analyst expectations. The shares gained more than five percent. British fashion retailer Debenhams also performed well, reporting an increase in Gross Merchandise Volume (GMV) for the first quarter, sending its shares up 23 percent. Within the Dax, Zalando shares were among the top performers, rising 1.9 percent.
HOCHTIEF POISED FOR PROMOTION TO BLUE-CHIP INDEX
According to index experts, construction group Hochtief could be promoted to the Dax for the first time. Hochtief is benefiting massively, particularly in the U.S., from the construction of data centers for Artificial Intelligence. The shares have surged approximately 190 percent over the past twelve months and were up 1.1 percent on Wednesday.
Shares in Suss Microtec rose 5.2 percent to a record high of 98.85 euros in the small-cap SDax index. The chip equipment supplier is considered a prime candidate for promotion to the mid-cap MDax. According to experts, online pharmacy Redcare Pharmacy could lose its place in the index. The index decision by Deutsche Börse subsidiary ISS Stoxx is expected around 8:00 PM.
(Report by Anika Ross, edited by Christian Götz. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
