The new week has brought a marked cooling of sentiment in the technology market, with the US100 index falling by 1.7 per cent at today’s opening. This sell-off is directly linked to a surprising consensus amongst the tech giants, who are unanimously warning against the overly rapid development of artificial intelligence. Dario Amodei, CEO of Anthropic, recently called for a drastic slowdown in the pace of AI model development and for these models to be closely monitored in order to minimise the critical risks posed by super-intelligent computer systems. Interestingly, his stance was almost immediately backed by Elon Musk and Sam Altman of OpenAI, who openly acknowledged the need to set new boundaries and improve the management of global technological security. This sudden shift towards industry-wide caution has deeply concerned market players, particularly as it was followed by concrete business decisions. Sam Altman officially confirmed that OpenAI will ultimately not file for an initial public offering (IPO) in 2026, deeming the current moment ill-timed due to the growing significance of AI model safety concerns. For Wall Street, this marks a painful postponement of one of the most eagerly anticipated stock market debuts, which has directly contributed to today’s sell-off on the index.
Donald Trump strongly disagrees with the technology sector’s cautious approach and is publicly seeking to debunk any narratives about virtual threats. The former president believes that the industry’s fears are greatly exaggerated, and that calls for regulation are the result of negative forces scaremongering with scenarios that are unlikely ever to materialise. Above all, however, Trump fears the loss of American dominance to China, a rapidly rising technological power. In his recent statements, he emphasises that the United States still leads China in the field of artificial intelligence and adds explicitly that whoever ultimately wins the AI race wins absolutely everything. His position becomes fully understandable when we look at Beijing’s current geopolitical offensive. President Xi Jinping has just announced at the BRICS summit that it is China that will take the global lead in supporting the development of artificial intelligence across the entire group of developing nations. Imposing administrative restrictions on American corporations at this crucial juncture could irrevocably hand the market advantage to powerful Asian competitors.
Despite the huge media hype and a clearly weaker start to the week, the fundamental picture for the main technology index does not look quite so bleak. Looking at current valuations with a cool head, one can see that the US100 is trading at exceptionally attractive, even low levels relative to its averages over recent months. The price-to-earnings ratio forecast for the Nasdaq 100 has fallen noticeably below its long-term 126-day average. Currently, this ratio is hovering around 22.8, which brings it right up against the lower band of the first standard deviation. Such a sharp compression in valuations suggests that the stock market may already have largely digested and priced in the negative scenarios associated with the slowdown in artificial intelligence development and cancelled IPOs. For investors taking a slightly broader view, the current, sharply reduced index levels may in fact present an excellent opportunity to seek out favourable investment opportunities. Source: XTB Research
The volume profile plotted on the US100 since the start of the year indicates that three zones of elevated volume have formed. The latest consolidation within the uptrend is being tested on the downside today, and if a break below occurs, this could signal a willingness on the part of sellers to push the price down, potentially from the next volume cluster, which may lie in the area of the recent lows following the sharp declines we saw in early August. At this stage, however, the long-term uptrend may not yet appear sufficiently compromised to suggest a risk of deeper declines, but everything will depend on incoming media headlines. Source: xStation
Oil back above $100
Economic Calendar: Inflation in Canada and Lagarde's speech in spotlight 🎯
Morning Wrap: A gloomy start to the week amid rising oil prices and turmoil surrounding OpenAI 🚨
🔴Daily summary: Wall Street ignores hawkish inflation, oil falls sharply despite geopolitical tensions
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.