Global stocks get AI lift ahead of packed 48 hours

What happened

Global stocks rose on renewed enthusiasm over AI ahead of earnings from Microsoft and Alphabet. Europe's STOXX fell 0.2% on declines in Banco Santander, UBS and a 12% slide in Adyen. MSCI's All-World index rose 0.2%, US stock futures edged up, and South Korea's Kospi surged 6% after strong SK Hynix earnings.

Confirmed

Global impact / market context

AI-related earnings from Microsoft and Alphabet are a test of whether big technology companies can show profits that justify their large spending on AI. If returns look weak, investors may reduce what they pay for those shares, which could pull down the wider market.

Analyst inference

Investors are focused on a crowded 48 hours of central bank rate decisions from the Federal Reserve, European Central Bank and Bank of Japan, plus major company results. New Zealand's central bank unexpectedly held rates, which sharply weakened its currency.

Analyst inference

What to watch

1. Alphabet and Microsoft report earnings after the market close on Wednesday, and investors will look for evidence of returns that justify the high cost of AI. Confirmed
2. Watch whether central bank rate decisions from the Federal Reserve, European Central Bank and Bank of Japan confirm or change expectations for borrowing costs, which affect company costs and stock prices. Proposed
3. If AI earnings disappoint, technology shares could fall and spread losses to broader indexes, while strong results could extend the rally led by chipmaker SK Hynix. Analyst inference

Evidence

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