Global Stocks Falter Amid AI Glitch and Middle East Tensions

World stocks experienced a second day of declines due to a slowdown in the AI rally and tensions between the U.S. and Iran. While tech stocks struggled in Asia, oil prices dipped following a ceasefire between Israel and Lebanon. Meanwhile, currency and bond markets remained cautious.

World stocks saw a second consecutive day of declines on Thursday as the AI rally stalled and renewed tensions between the U.S. and Iran affected market sentiment. Oil prices fell after Israel and Lebanon announced a ceasefire.

European markets opened steadily, with both crude and bond yields retreating. Wall Street futures suggested further declines, and Asian markets struggled, with Korea's stocks dropping 2.6%. Japan's Nikkei 225, Hong Kong, and Taiwan also fell between 1.4% and 1.7%, following a sharp fall in Broadcom shares.

Broadcom's disappointing quarterly revenue and unchanged long-term projections worried traders, questioning the growth prospects for AI chip demand. Meanwhile, currency markets were cautious, with the yen strengthening slightly. The U.S. dollar index stayed near a two-month high, driven by positive U.S. PMI data.