Wall Street Opens Lower as Tech Sell-Off and Middle East Tensions Weigh on Markets
Wall Street and European markets dropped amid Middle East tensions, oil price surges, and tech sell-offs. American Express announced a 5% workforce reduction following strong earnings.
Wall Street opened lower following sharp losses in the previous session and escalating geopolitical tensions in the Middle East that pushed oil prices sharply higher. S&P 500 futures and other major indices signaled downward pressure. Meanwhile, American Express announced a global workforce reduction of 5%, or approximately 3,500 jobs out of its 78,000 employees, as CEO Stephen Squeri aims to curb rising operating costs.
Financial institutions have increasingly trimmed headcounts in recent months, with several firms attributing the moves to the growing integration of artificial intelligence. Barclays recently announced 5,000 job cuts, while Bloomberg reported that HSBC plans reductions in its UK wealth management division, alongside ongoing workforce optimizations at Citigroup. Squeri noted that the streamlining efforts are designed to make the company more agile, reduce management layers, and accelerate decision-making processes.
The announcement followed third-quarter financial results that outperformed consensus projections. American Express reported an adjusted earnings per share of $4.68, surpassing the $4.49 average estimate compiled by Bloomberg. The company also upgraded its full-year 2026 earnings per share guidance to a range of $18.30 to $18.60, up from its previous forecast of $17.30 to $17.90.
European markets traded lower amid lingering risk aversion. The Eurozone's composite PMI fell to 51.9 from 53.1, marking a four-month low and missing Reuters consensus expectations, pressured by high energy costs and domestic political headwinds in France. France registered the weakest performance, with its composite PMI dropping to 48.4 from 51.1 and signaling a return to contraction. Bond market pressures also mounted, with the 10-year French government bond yield hovering around 5.07%, compared to 3.33% in Germany, creating a spread exceeding 100 basis points.
In the technology and corporate sectors, Wall Street recently suffered its worst trading session since July, driven by a sell-off in tech shares, Middle East conflict escalation, and mounting anxiety over massive AI capital expenditures. The Nasdaq Composite plunged roughly 2.6%, and the S&P 500 dropped 1.4%, while the Dow Jones Industrial Average showed relative resilience with a minor 0.1% dip. Meta Platforms shares fell after the company outlined plans for expanded capital outlays, stoking investor concerns over debt-financed AI infrastructure. The broader debate over an AI bubble continues to divide markets, even as upcoming earnings reports from major infrastructure investors such as Google (Alphabet), Microsoft, and Amazon loom large alongside reports from companies like Tesla and SpaceX.
