Headline: Energy Transition Reset and Tech Sell-Off Jolt Global Markets
Introduction: Global markets turned risk-off as the energy transition met fresh headwinds, major tech stocks slumped, and currency moves reflected shifting policy expectations. While some renewable developers are pulling back amid rising costs, industrial buyers are locking in long-term green power to hedge energy risk and advance sustainability goals.
Renewable energy faced a reset as cost inflation, grid bottlenecks, and permitting delays squeezed returns. Ørsted moved to reduce headcount and Shell exited select projects, underscoring how energy security and disciplined capital allocation are guiding decisions. Yet corporate demand for clean electricity remains resilient: Rio Tinto signed a 15-year virtual power purchase agreement for 78.5 MW of wind capacity to power its Utah operations and accelerate ESG objectives. Miners and heavy industry are increasingly turning to wind and solar VPPAs to stabilize electricity costs, cut Scope 2 emissions, and meet decarbonization targets.
Equities stumbled as investors pared expectations for imminent Federal Reserve rate cuts and reassessed stretched AI valuations. The Dow fell about 800 points, with the S&P 500 and Nasdaq under heavy pressure; Nvidia and Tesla dropped roughly 5%, stoking concerns about momentum, earnings durability, and higher-for-longer rates. In foreign exchange, EUR/GBP climbed above 0.8852—a roughly 2.5-year high—after the UK stepped back from a planned income tax rate increase, weighing on sterling. In Japan, officials signaled it is too early to set a numerical minimum-wage target, preferring conditions that support pay gains above inflation without mandates. Separately, UBS estimated China’s AI data-center power additions at 5–6 GW versus 40–45 GW in the US, calling the build-out measured while lifting its outlook for Chinese power demand and energy investment.
Key Points: – Renewable developers face rising costs and project challenges; Ørsted cuts jobs while Shell exits select initiatives. – Rio Tinto signs a 15-year VPPA for 78.5 MW of wind power to support Utah operations and ESG goals. – US stocks slide; Dow down around 800 points as Nvidia and Tesla fall about 5% on valuation and rate concerns. – Traders scale back near-term Fed rate cut bets, pressuring growth and AI-related shares. – EUR/GBP tops 0.8852 after the UK drops an income tax rate hike plan, lifting the euro against sterling. – UBS sees China’s AI power build-out at 5–6 GW vs 40–45 GW in the US, raising forecasts for China’s power demand and investment.
