Europe set to open lower as Democratic sweep fuels AI regulation fears

Europe set to open lower as Democratic sweep fuels AI regulation fears

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1 hours ago

Nov 4 (Reuters) - European shares were likely to open lower on Wednesday, with tech stocks in focus after Democrats won control of both chambers of the US Congress, fuelling concerns that tighter AI regulation

could dampen investment in a sector that has driven much of the recent rally.

Futures tracking the STOXX 600 were down about 0.2% by 0639 GMT, having recouped some losses following a 1.4% slide during Asian trade.

Contracts tracking the German DAX dipped about 0.2%, while those of UK's FTSE 100 lost 0.4%.

Democrats captured majorities in both the Senate and House on Tuesday, scoring victories in conservative bastions including South Carolina and Texas, delivering a scathing rebuke to US President Donald Trump.

The result weighed on global equities, as investors feared that stricter oversight of data centre construction, which has already faced resistance in the US, could make AI companies more cautious about spending on the technology.

While technology companies account for only about 7% of the STOXX index, the sector has posted the third-strongest gains so far this year, behind energy and chemicals, supported by robust demand for AI infrastructure.

Companies linked to AI-related spending, including equipment makers such as Siemens Energy and Schneider Electric will also be in focus.

Elsewhere, Novo Nordisk is likely to gain attention after the Wegovy maker reported third-quarter adjusted operating profit above expectations and raised its full-year sales and profit forecasts.

Investors will keep a close eye on the broader healthcare sector as they weigh prospects of increased US regulation around drug pricing.

(Reporting by Johann M Cherian in Bengaluru; Editing by Sherry Jacob-Phillips)

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