BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening flat to slightly lower on Tuesday as doubts linger over the sustainability of the AI boom.
Shares of Samsung Electronics slumped nearly 10 percent today despite the world's largest memory chipmaker flagging a 19-fold jump in second quarter operating profit from a year earlier, fueled by soaring demand for memory chips needed in AI data centers.
As rising capital expenditures and competition become synonymous with rising semiconductor demand, investors are questioning the sustainability of record earnings.
Beyond the debate over artificial intelligence, investors also await the U.S. Federal Reserve's meeting minutes and the start of the second-quarter U.S. earning season this week to gauge the outlook for consumer demand.
Delta Air Lines and PepsiCo are due to report their earnings results later in the week ahead of a more vigorous earnings season.
Meanwhile, dovish Fed bets are on the rise following a surprisingly weak June jobs report.
Markets currently see a 25 percent chance of a 25-basis-point rate hike at the Fed's July 29 meeting, according to CME's FedWatch tool.
The minutes of last month's Fed meeting under new Chair Kevin Warsh are due on Wednesday.
Fed Governor Chritopher Waller, in his assessment of inflation targeting, said that forward guidance can be a 'valuable tool', but overly rigid commitments can hinder the Fed's ability to respond to changing data.
Microsoft, which is investing heavily in AI, said it would lay off 4,800 employees, or 2.1 percent of its workforce, immediately after carrying out a voluntary retirement program.
Asian markets were broadly lower, with South Korea and Japan leading regional losses.
The dollar faced headwinds as markets scaled back expectations for Federal Reserve rate hikes this month and in September.
Gold fell towards $4,100 an ounce on the back of firm U.S. yields and a steady dollar.
Brent crude futures traded above $72 a barrel, holding near a more than four-month low on signs of rising supply through the Strait of Hormuz.
Saudi Arabia cut price of its main crude grade effective August for Asian customers after OPEC+ members backed another modest rise in collective quota for next month.
U.S. stocks closed higher overnight as investors returned from the Independence Day holiday weekend.
Broadcom and other chip stocks rallied after the company said it would expand its partnership with Apple through 2031 to develop and supply custom chips.
In economic news, data showed U.S. services sector growth slowed in June, but the employment index rebounded after months of contraction.
While the Dow rose 0.3 percent to reach a new record closing high, the tech-heavy Nasdaq Composite surged 1.1 percent and the S&P 500 advanced 0.7 percent.
European stocks eased from record levels on Monday as investors reacted to regional PMI data and some corporate news.
The pan European Stoxx 600 dropped 0.4 percent. While the German DAX edged up 0.2 percent, France's CAC 40 and the U.K.'s FTSE 100 both dipped around 0.3 percent.
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