Oil rose to $100 a barrel on Thursday while the group of large technology stocks often called the "Magnificent 7" shed almost $800 billion in combined market value. The sell-off was driven by investor worries about rising capital spending tied to artificial intelligence and by geopolitical tensions related to Iran.
Market sentiment and volatility
The Wall Street fear gauge, the VIX, climbed to its highest level in a month. A Reuters columnist noted that higher crude prices have revived inflation concerns and highlighted how fragile the market’s recovery has been.
Tech earnings and investor focus on capex
Quarterly results from technology companies failed to reassure investors who are particularly focused on capital expenditures. Market participants said any sign that AI-related spending is accelerating prompts swift selling in the sector: "Any chink in the armor and the stocks are being sold off," an investment strategist commented.
Outlook for oil
Despite current strength in oil prices, some investors are betting that crude will fall in the coming months. Part of that expectation stems from the view that Washington may face pressure to ease tensions with Tehran, which could reduce the risk premium on energy markets.
(Byline: Brendan Ruberry)
