Concerns About AI Taking Center Stage
July 17, 2026
With wars in the Middle East hopelessly stalemated and central bankers proceeding with caution in responding to elevated energy prices and geopolitical uncertainty, the world financial community has turned its attention to Artificial Intelligence for fresh material from which to react. What investors see has created alarm: enormous business spending to build data centers intended to fuel AI’s appetite for electrical power, wildly over-priced tech shares that haven’t been matched yet by promised profits, more and more pundits warning about a coming correction like the dot-com bust a quarter century ago, a mounting grass-roots political aversion to the brave new world promised by AI, and dysfunctional political leadership that is way out of its league to make sure the worst fears of AI don’t happen and that the inevitable transitional dislocations accompanying artificial intelligence are addressed appropriately. Climate change, which arguably poses the greatest medium-term threat to mankind in our times, seems likely to be accelerated, not mitigated, by a rush into AI without guardrails.
Stock markets in Asia plunged today by 6.5% in Taiwan, 6.4% in South Korea, 4.0% in Japan, and 3.1% in China. A 1.7% slide in the tech-intensive Nasdaq leads the loss in U.S. stock futures, and both the Paris CAC and Italian bourse are sporting 0.9% declines.
The price of West Texas Intermediate crude oil is 2.4% higher today, setting the stage for a 10% or more gain in the past week.
President Trump on short notice gave a surreal prime time address last night that rather than laying out a strategy addressing concerns about elevated living costs, resolving the war against Iran, or ameliorating concerns about AI, focused instead on his stale claims about the 2020 election and a demand for overhauling the way America conducts elections. The speech’s disconnection with the issues that are on people’s minds seems to have added momentum to public anxiety.
A mixed bag of U.S. data released at 12:30 GMT (08:30 EDT) didn’t stem the pessimism expressed in the stock market. A monthly 0.3% rise of U.S. import prices in June was the smallest gain so far this year but compared unfavorably with expectations of a decline of more than 0.5%. Year-on-year import price inflation accelerated further to 7.1% from 6.7% in May and zero percent last December. Excluding fuel, import price inflation climbed half a percentage point to 4.2% and contrasted with a mere 0.7% in June of 2025. U.S. export price inflation was in double digit territory for a second straight month at 10.2%. Housing starts delivered a much better figure than anticipated, leaping 19.0% on month and also unexpectedly exceeding the year-earlier level by 3.5%.
U.S. industrial production rose just 0.1% for the second month in a row during June. The increase between 1Q and the second quarter was 1.0%. Comparisons against a year-earlier amounted to 1.1% in June and 1.3% in the quarter. The rate of capacity usage, 76.1%, matched the April and May readings but exceeded 74.8% in June 2025.
Major dollar relationships like EUR/USD (-0.1%) and USD/JPY, which is unchanged on the day, show minimal reactions to the U.S. data news. Ten-year sovereign debt yields are unchanged in Germany but two basis points lower in the United States and Japan. Since the U.S. reports, today’s net drop in the price of Bitcoin has roughly doubled to -1.5%. Gold and silver are 0.4% and 1.4% lower in price.
The final estimate of consumer price inflation in the euro area during June was left unrevised from a flash estimate of 2.8% and is the lowest since March. The energy component had increased year-on-year by 10.8% in both April and May but slowed to 8.5% in June. Food and services fell to 1.5% and 3.2%. Inflation rates in Germany (2.4%), France (2.0%) and Italy (3.0%) were below May readings but above their respective June 2025 inflation rates. Spain’s 3.6% reading was the same as in May and well above 2.3% in June 2025.
Other price data released today include
- Malaysian consumer prices for June, which were flat compared to May and at a 2-month low of 1.9% year-on-year.
- Austrian CPI inflation, which slowed to a 3-month low of 3.2% last month from a 5-month high in May of 3.7%.
- Polish CPI inflation in June was left unrevised from the preliminary estimate of 2.5%, a 4-month low.
- Food price inflation in New Zealand of 2.5% in June was its lowest in 16 months an down from 5.0% in July-August 2025.
- Slovakian CPI inflation of 3.5% constituted a 3-month low.
Today’s other data report of interest involved Euroland’s current account, which in May posted a seasonally adjusted surplus of EUR 25.1 billion but a non-adjusted deficit of EUR 6.19 billion. As a percent of GDP during the twelve months ending in May, the current account equaled 1.7%, down from 2.0% in the twelve months through May of 2025.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Euroland current account, Trump speech, U.S. import prices
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