Morninga Wrap: Wall Street Under Pressure. AI Loses Momentum, Netflix Disappoints, and the Persian Gulf Erupts

📈 Stock Markets – North America & Asia

• Wall Street ended yesterday's session with moderate declines, during which the S&P 500 index lost 0.5% and the Dow Jones fell by 0.2%. The technology sector performed the worst—Nasdaq deepened its losses to close approximately 1.5% lower.

• Companies related to artificial intelligence and semiconductors were once again under pressure, despite very strong financial results from Taiwanese chipmaker TSMC. Investors are increasingly concerned that AI company valuations are too high and that massive capital expenditures on AI infrastructure development may not yield the expected returns, triggering a broad sell-off across the tech sector.

• Sharp declines hit memory chip manufacturers, resulting in Micron shares falling by over 5.5%, while SanDisk stock slid by more than 12%.

• Google shares came under pressure following reports that the launch of its flagship AI model, Gemini 3.5 Pro, has been delayed by several months due to failing to meet internal performance targets. This news heightened investor worries that Alphabet is losing momentum in the race for AI dominance.

• The sell-off in AI-related tech stocks spilled over into Asian markets, where technology and semiconductor shares faced heavy pressure, dragging down the region's main indices. The steepest losses were recorded by Japan's Nikkei 225, dropping over 5.5%, and China's Hang Seng, falling by about 2.5%, while South Korea's KOSPI remained closed due to a public holiday.

📊 Earnings Season – Netflix

• Netflix shares came under pressure after the company released its next-quarter guidance, which fell short of Wall Street expectations.

• The company forecast revenue of $12.86 billion and earnings per share (EPS) of $0.82, compared with analyst consensus estimates of $13 billion in revenue and $0.84 EPS. The weaker outlook triggered a decline in the stock during after-hours trading.

• Investors are increasingly focused on signs that Netflix’s business is entering a more mature phase, with growth slowing as the company shifts its focus toward new revenue streams such as advertising, live streaming, and gaming.

• Netflix also announced plans to reduce the frequency of publishing viewing-hour data, raising concerns among some investors about future transparency and the ability to fully assess the platform’s performance.

• Despite the disappointing third-quarter outlook, Netflix’s fundamentals remain solid. The company continues to deliver steady revenue growth, expand its advertising business, and increase the use of artificial intelligence (AI) in content production and personalization.

• The company also emphasized that total viewing hours are no longer the most important measure of business value, with profitability and actual revenue generation now becoming significantly more important metrics.

🌍 Geopolitics

• The conflict between the United States and Iran is escalating again, after US armed forces carried out their sixth consecutive night of airstrikes, expanding targets to Iranian transport and logistics infrastructure, including bridges, railways, and the vicinity of the port of Bandar Abbas. Washington also confirmed actions to enforce a naval blockade of Iran, which includes detaining and disabling vessels heading to Iranian ports, thereby restricting traffic in the Strait of Hormuz.

• Iran responded with further attacks on US targets in the region, and the Islamic Revolutionary Guard Corps (IRGC) announced that no crude oil or natural gas will be transported through the Strait of Hormuz as long as US airstrikes continue. Additionally, unconfirmed reports emerged of an attack on the King Fahd Causeway connecting Bahrain and Saudi Arabia, heightening fears of further escalation in the Persian Gulf.

🛢️ Commodities

• Geopolitical tensions are supporting rising crude prices, setting the commodity on track for its largest weekly gain since April, as investors worry about supply disruptions from the Middle East, a region responsible for a major share of global oil exports.

• Crude oil futures remain elevated, with Brent hovering around 84 USD per barrel and WTI priced at approximately 78 USD per barrel.

🪙 Precious Metals

• The precious metals market is experiencing a mixed start to the day, with gold gaining slightly but still holding below the 4,000 USD per ounce level.

• Meanwhile, silver is losing ground, testing the 55 USD per ounce area.

🪙 Cryptocurrencies

• The cryptocurrency market remains under selling pressure, as Bitcoin loses about 1.9%, falling below the 63,000 USD level, while Ethereum slides over 2.5%, dropping below the 1,830 USD mark.