Global stock markets stabilised on Tuesday after recent heavy selling as investors continued to grapple with unsettled risk sentiment tied to artificial intelligence fears and new tariff policies from the United States.

Major indexes had tumbled recently, with technology and payments stocks among the hardest hit amid worries about AI’s disruptive impact on corporate profits and job markets.

Equities in Europe and Asia reflected mixed flows, with some markets managing modest gains while others remained flat. Traders said that uncertainty about U.S. trade policy, especially the timing and scope of tariff increases, weighed on risk appetite and drove cautious positioning.

Market sentiment remains fragile as earnings and policy cues loom ahead.

In Asia, markets were mixed as sentiment struggled to find direction following Wall Street’s recent downturn, with technology-linked sectors under renewed pressure even as broader indices held near prior levels.

Currency and commodities markets reflected similar caution, with safe-haven flows slightly stronger amid risk concerns. Bond yields moved within narrow bands as investors waited for clearer signals from macroeconomic data and central bank commentary expected later in the week.

Traders said volatility may persist in thin market conditions ahead of key U.S. employment and inflation reports scheduled next week.

Analysts noted that equity rotation patterns suggest investors are balancing growth prospects against policy uncertainty, particularly in technology and industrial sectors most exposed to AI-induced disruption risks.

Safe-haven assets such as gold saw modest interest, while energy prices fluctuated amid broader macro narratives. Sector performance varied widely, with select cyclical and value stocks outperforming defensive names.

Longer-term market confidence, analysts said, is increasingly tied to clarity on trade policy and AI’s real economic impact.

Financial professionals cautioned that short-term trading patterns may remain choppy, with technical indicators showing increased sensitivity to headline risk.

Market breadth remained uneven, reflecting pockets of optimism in some regions and caution in others. Trade volumes were lighter than normal, characteristic of early year trading patterns ahead of major macro events.

Investors said that upcoming earnings releases from major corporations and more detailed policy guidance from central banks will be critical catalysts.

These developments could help stabilise risk sentiment and either amplify or ease the current cautious market tone.

Source: Reuters