Between the fall of semiconductors in Asia and the declines in the luxury sector in Europe, global markets are facing a difficult session, marked by investor nervousness.
International markets are going through a difficult phase. Whether in Asia, Europe or the United States, stock indices are falling. At the source of this turbulence: the technology and luxury sectors, hit hard by disappointing results and sluggish demand. While yesterday’s session was already marked by significant declines, the trend is confirmed this morning, leaving investors uncertain about the global economic outlook.
Asian markets impacted by the fall in semiconductors
In Asia, stock markets opened in the red, carried away by the fall in the semiconductor sector. In Tokyo, the Nikkei index fell 1.94%, falling below 39,200 points.
This drop is directly linked to the poor performance of chip manufacturers, following the news regarding ASML. The Dutch giant, a key supplier to the semiconductor industry, has revised its targets for 2025 downward, sending shock waves through the sector.
In the wake of these announcements, companies like Advantest and Renesas saw their shares fall by 3% and 4.48% respectively. In addition, uncertainty is growing around the impact of new US restrictions on the export of advanced chips to China, increasing investor nervousness according to Le Figaro.
Wall Street: semiconductors and energy in decline
On the other side of the Pacific, Wall Street was not spared. After records reached at the start of the week, the New York Stock Exchange closed sharply lower yesterday. The Nasdaq, in particular, lost 1.01%, penalized by the decline in Nvidia and AMD shares, also affected by the gloomy outlook for the chip sector.
The Dow Jones index also fell 0.75%, due to the decline in the energy sector. Oil prices fell by more than 4%, held back by anticipated falling demand in an uncertain geopolitical context.
In addition, the prospect of a further reduction in key rates by the Federal Reserve was not enough to allay fears, even if certain economic indicators, such as retail sales, reassured about the health of the American economy.
Europe weighed down by luxury and corporate results
In Europe, the trend is similar. This morning, the CAC 40 opened down 1% according to Bourse Directmainly due to the fall of the luxury sector. LVMH, leader of the sector, saw its shares tumble 6.8% after publishing disappointing results for the third quarter. This decline was followed by Kering and Hermès, which also suffered from weak Asian demand, particularly in China.
At the same time, the outlook for European businesses is being tarnished by warnings from several major players. Ipsos, Eramet and Rexel have all revised their growth forecasts for 2024, citing insufficient demand in their respective sectors. This has aggravated the concerns of investors, who are now scrutinizing the next meeting of the European Central Bank (ECB) for signals on the evolution of monetary policy.
Economic outlook under surveillance
While the markets digest this discouraging news, eyes are turning to the next economic announcements. In China, quarterly GDP figures, expected on Friday, could have a major impact on global stock markets, given the weight of the world’s second largest economy in overall demand.
For their part, European investors are awaiting decisions from the ECB, whose comments on economic growth could influence short-term trends.
In the United States, the quarterly results season continues to punctuate the markets, with giants like Bank of America and Citigroup at the center of attention. These results, combined with industrial production data, will provide additional clues about the trajectory of the U.S. economy in the months to come.
