Here’s something I hadn’t given much thought to until recently: Could the artificial-intelligence boom be throwing off some of Wall Street’s old, reliable stock-market signals? Take, for instance, the relationship between gold and platinum prices — which has a surprisingly strong historical record of predicting stock-market returns over the 12 months that follow. Right now, it’s flashing a warning for investors.
How to navigate a market that hinges on just a handful of companies Play video: How to navigate a market that hinges on just a handful of companies There’s a catch, however: It was issuing the same warning a year ago. And it was flat-out wrong. Your daily dive into MarketWatch, featuring story spotlights, market movers and more you Need To Know to start your day.
I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. Could the enormous AI infrastructure build-out be changing demand for metals used in electronics and technology, and perhaps undermining the usefulness of this old market signal?
I think it’s a question work asking, though plenty of other forces influence gold and platinum prices. Wall Street isn’t alone in wrestling with a puzzle. The Federal Reserve has its own today: How do you solve a problem like inflation?
We’ll hear from the central bank later, followed by earnings from Microsoft and from Google parent Alphabet. **On markets:**Bond investors are starting to demand more to lend to AI-related companies. Along with making those companies’ borrowing costlier, it raises a bigger question: How much more expensive can financing get before it starts to slow the AI build-out? Investors still see attractive yields elsewhere in the bond market, but they’re growing wary of AI-related debt after heavy borrowing this year and amid mounting concerns about future funding needs, according to Andrzej Skiba, head of fixed income at RBC Global Asset Management. **On trading:** South Korean memory-chip maker SK Hynix delivered strong earnings, but its outlook may be the bigger story: It expects supply constraints to persist through 2030.
That’s another indication of the intensity of AI demand and its impact on the chip business, with tech stocks pointing toward opening gains Wednesday. ✈️JetBlue shares soared nearly 20% Tuesday after the airline outlined a path to profitability. There’s one important proviso: It doesn’t expect to reach operating profitability until 2027 or generate positive free cash flow until 2028. The airline hasn’t been profitable since before the pandemic.
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