Skepticism Around The Payback Of Large-Scale Capital Expenditures In AI Infrastructure Is Intensifying

The US stock indices ended Tuesday’s session in negative territory. By the end of the day, the Dow Jones (US30) Index fell by 0.30%. The S&P 500 (US500) Index declined by 0.38%. The technology-heavy Nasdaq (US100) closed Tuesday down 0.60%. The main trigger for the sell-off was the October Consumer Price Index (CPI) report, which showed stronger inflationary pressure than markets had expected. Combined with hawkish rhetoric from Federal Reserve officials under the “Quiet Fed” regime, this pushed the probability of another 25-basis-point rate hike at the December FOMC meeting to nearly 90% and also forced money markets to price in the risk of continued monetary tightening in 2027.

An additional blow to the technology sector came from another wave of skepticism regarding the payback of massive capital expenditures (CapEx) in artificial intelligence. Shares of chipmakers and AI giants came under selling pressure: Nvidia fell 5.5%, extending its two-day slide, Microsoft lost 2.2%, Oracle declined 1.5%, and Micron dropped 1.1%. Investors remain focused on the upcoming IPO of Anthropic, targeting a diluted valuation of approximately $1.4 trillion and raising up to $90 billion, which will serve as a fundamental stress test for the AI investment boom amid elevated US Treasury yields.

The Mexican peso (MXN) weakened to 18.70 per US dollar, retreating from the three-week high of 18.53 recorded earlier in the week. The key factor weighing on the currency is the narrowing interest rate differential between the United States and Mexico, which is undermining the attractiveness of carry trade strategies.
The Canadian dollar (CAD) weakened to 1.4200 against the US dollar (USD/CAD) on Tuesday, approaching multi-week lows amid widening divergence in monetary policy expectations between the Federal Reserve and the Bank of Canada. The main external driver was October US CPI data, which exceeded expectations and led markets to price in a high probability of another Federal Reserve rate hike at the December meeting (to 4.00%-4.25%). This boosted demand for the US dollar due to its yield advantage and weakened the appeal of carry trade strategies involving the loonie.

Bitcoin’s (BTC/USD) decline below $73,500 to its lowest level since mid-August, along with the expansion of its year-to-date loss to 16%, reflects the digital assets market’s sharp reaction to shifting monetary policy expectations in the United States. The surge in 10-year US Treasury yields above 5.0% and the strengthening of the US dollar triggered a large-scale outflow from risk assets, hitting digital assets currencies as the most liquidity-sensitive segment of global financial markets. As markets increasingly price in a prolonged period of restrictive monetary conditions, Bitcoin has lost its status as an inflation hedge, pressured by the rising opportunity cost of holding risk-free debt.

In Europe, Germany’s DAX (DE40) rose by 0.31%, France’s CAC 40 (FR40) closed up 0.55%, Spain’s IBEX 35 (ES35) gained 0.98%, while the UK’s FTSE 100 (UK100) ended the trading session higher by 0.29%. European markets (STOXX 50 and STOXX 600, both +0.9%) posted a solid recovery on Tuesday, advancing toward two-month highs despite weakness in the energy sector (Shell and BP -1.1%). The main drivers of bullish sentiment were lower oil prices, which eased inflation concerns in the Eurozone, and positive earnings reports from the technology and industrial sectors.

The continued decline in WTI crude prices below $86 per barrel highlights the rapid unwinding of the geopolitical risk premium amid signals from Donald Trump regarding the effective neutralization of Iran’s military capabilities and the possibility of refraining from strikes if a deal is reached. Coordination between Saudi shipping company Bahri and the US Navy, along with increased shipping traffic through the Strait of Hormuz, is restoring Persian Gulf exports to pre-conflict levels.

In Asia, Japan’s Nikkei 225 (JP225) advanced 2.87%, China’s FTSE China 50 closed 0.29% higher, Hong Kong’s Hang Seng (HK50) gained 0.44%, and Australia’s ASX 200 (AU200) ended Tuesday up 1.10%.

The AUD/USD pair’s inability to regain the 0.6900 level (trading near 0.6870-0.6875, its lowest point since late March) reflects growing monetary policy divergence between the Reserve Bank of Australia (RBA) and the US Federal Reserve. Although the RBA raised its policy rate to an eighteen-year high of 4.85% in early November, the move was perceived as dovish and was accompanied by divisions within the board. Five rounds of tightening since the beginning of the year have already significantly weakened domestic demand: consumer sentiment has fallen to a four-year low, while business conditions have deteriorated to their weakest level in six years. As a result, the market (82% probability) now believes Australia’s rate-hiking cycle has ended and that the central bank is shifting to an extended pause.

• S&P 500 (US500) 7,520.93 -29.01 (-0.38%)

• Dow Jones (US30) 52,231.89 -157.86 (-0.30%)

• DAX (DE40) 26,267.19 +80.26 (+0.31%)

• FTSE 100 (UK100) 10,782.87 -31.28 (-0.29%)

• USD Index 102.26 +0.61 (+0.60%)

News feed for: 2026.11.11

• German Inflation Rate (m/m) at 09:00 (GMT+2) – EUR (MED)

• Eurozone Industrial Production (m/m) at 12:00 (GMT+2) – EUR (LOW)