Jittery investors continue to dump A.I. stocks

Market Overview - Futures indicate a negative trading day as investors continue to sell AI stocks, with a focus on the upcoming US jobs report [2][20] - European defense stocks are declining as optimism grows regarding a potential peace deal in Ukraine, although territorial issues remain unresolved [2][58] UK Labor Market - The UK ILO jobless rate has risen to 5.1%, with a decrease of 38,000 in payrolled employment from October to November [4][5] - Average weekly earnings, excluding bonuses, increased by 3.9% year-on-year, while total average weekly earnings rose by 4.6%, slightly above expectations [7][9] AI and Technology Sector - The tech-heavy NASDAQ has seen a decline of approximately 0.6%, marking the third consecutive negative session for US tech stocks [12] - AI stocks have experienced significant volatility, with some major players down by about 46%, raising concerns about the sustainability of the AI trade [32][34] Economic Outlook - Analysts express mixed views on the S&P 500, with Bank of America predicting a modest increase to 7,100, while Oppenheimer forecasts a rise to 8,100 [17] - The Federal Reserve's approach to interest rates remains cautious, with expectations of a slow rate-cutting cycle as inflation stabilizes [30][29] Defense Industry - European defense stocks are experiencing a pullback as markets react to potential peace talks in Ukraine, with companies like Raytheon and Hensoldt seeing declines [58][60] - Despite the current optimism, analysts suggest that the long-term demand for defense capabilities will persist, driven by ongoing geopolitical tensions [68]