Crédit Mutuel Asset Management analyzes September market risks and AI energy demands

François Rimeu, Chief Strategist at Crédit Mutuel Asset Management, analyzes potential market volatility in September. While September is historically a difficult month for equities, current drivers such as strong nominal growth, high corporate margins, and massive investments in artificial intelligence may provide support. Nominal growth is currently being fueled by high household deficits and AI-related capital expenditures.

However, risks remain, including rising long-term interest rates in the US and Europe. The return of central bankers from summer breaks, increased bond market activity, and political milestones like US midterm elections and the 2027 French elections could contribute to market turbulence. A significant risk to the current constructive scenario would be a decline in nominal growth, potentially caused by reduced US government spending.

Additionally, the rapid expansion of AI infrastructure is creating a massive demand for electricity. New data centers require gigawatts of power, leading to a global race for energy capacity. This surge in demand for semiconductors, memory chips, and power infrastructure presents new opportunities for energy providers and suppliers, even as geopolitical tensions in the Strait of Hormus pose risks to energy stability.