Opening Bell - Morning Commentary

Tech Retreat Deepens Amid AI Bubble Concerns, Nvidia Results Awaited

Wall Street stocks closed sharply lower on Tuesday as technology shares retreated amid concerns about AI valuations, and bitcoin briefly dipped below $90,000, signalling reduced risk appetite.

All three major U.S. stock indexes ended deep in negative territory, while crude, bitcoin, and gold advanced, and Treasury yields dipped.

Nvidia shares tumbled as traders braced for results that could significantly impact markets, given recent AI bubble fears. Outside tech, Home Depot slipped after missing earnings and cutting its full-year outlook.

European shares hit a one-month low, with German stocks at near five-month lows, as investors grew wary of tech valuations and dimming prospects for a December Fed rate cut.

A strong Nonfarm Payrolls report on Thursday could trigger repricing for further easing next month. According to the CME FedWatch Tool, markets now assign a 50% probability to a December rate cut—up from 46% earlier in the day but below last week's 67%.

Oil prices slipped 0.5% to around $60, as supply concerns rose and a modest U.S. inventory build has kept oil relatively stable despite broader market selling.

Nifty snapped its six-session winning streak yesterday, slipping 103 points to close at 25,910 as broad-based selling dominated the session.

A breakdown below the low of 25,876 could open the door for further declines toward the next support zone of 25,700–25,750.

On the upside, Nifty needs to reclaim the 26030 high.

Indian markets are likely to open mildly higher on the back of positive Asian cues.

Nvidia's Wednesday earnings report will test whether the AI boom has staying power amid mounting valuation concerns.