US tech remains in focus, as we look ahead of raft of Magnificent Seven earnings

• FTSE 100 on the rise as index benefits from lack of big tech.

• Crude regaining lost ground, although questions remain.

• US tech remains in focus, as we look ahead of raft of Mag7 earnings.

The FTSE 100 continues to sail through choppy water with relative ease, as European traders enjoy a brief period of outperformance built around the general lack of big tech companies this side of the Atlantic. The questions that have emerged around a handful of huge AI-focused US tech companies provide the basis for a massive value recalibration if the DeepSeek news can be taken at face value. However, the FTSE 100 instead finds itself on the rise, with the pessimism over lost earnings for the likes of Nvidia instead standing to benefit global businesses where the financial barrier to entry for those seeking to use AI is lower. Chinese stocks continue to rise as people seek the weigh up the validity of the valuation disparity compared with US in a world where AI isn’t just a US-centric affair.

Energy markets are attempting to claw back losses after yesterday’s slump, as markets continue to weigh up the potential implications of a world under Trump. The prospect of a prolonged halt to the conflict between Isreal and Hamas opens the door to a return to the key shipping route through the Red Sea, driving down transit times as ships avoid the lengthy route around the Cape of Good Hope. Nonetheless, risks remain over the potential breakdown in relations between the US and Canada, as Trump’s irritation over the trade deficit between the two countries ignores the fact that without energy they would actually have a surplus. Therefore, Trump’s desire to utilise tariffs in a bid to pressurise the Canadians could instead damage their supply of oil & gas, which could prove inflationary.

Looking ahead, all eyes will remain firmly planted on the US tech names, following a session that saw Nvidia lose a record $589bn of its market capitalisation. That decline also pushed Nvidia into the third spot behind Apple and Microsoft after just four days of being heralded as the world’s most valuable company. The timing of this week’s news will not be lost on many in the markets, with four of the Mag7 names reporting over the course of Wednesday and Thursday. Undoubtedly, we will see many adjust their statements to shed light on how new developments could drastically reduce capital expenditure going forward. However, it is important to weigh up the possibility that Nvidia chips remain a key component of the DeepSeek repertoire, and thus the idea that all development can be done on a shoestring budget remains unproven for the time being.