Piazza Affari is pulling back on physiological profit-taking after hitting new all-time highs yesterday, while the Tokyo Stock Exchange closed at fresh records today, bolstered by a rally in AI-related stocks that offset Middle East concerns.

Indeed, the AI boom continues to drive global markets, even as hostilities resumed in the Gulf. An Iranian missile strike damaged Kuwait International Airport, and U.S. forces conducted strikes near the Strait of Hormuz, with diplomatic efforts showing little progress.

On the macro front, ADP private payroll data is due this afternoon, serving as the traditional precursor to Friday's official government employment report.

By 9:35 CET, the FTSE MIB is trading down 0.66%.

Banks are seeing sharp declines, with the sector index falling 1%. Heavyweights UNICREDIT and INTESA are being sold off, dropping 1.3% and 0.8% respectively. MPS is also down 1%.

Following yesterday's 15% surge, STM is seeing slight profit-taking with a 1.1% decline. The rally was triggered after the Franco-Italian chipmaker upwardly revised its revenue guidance for data centers, now expected to reach approximately $1 billion by 2026 compared to the previous 'well above' $500 million forecast, with potential to double again in 2027.

WEBUILD is a bright spot, rising approximately 2% after Lane, a group subsidiary, was awarded a $1 billion joint venture contract in Pennsylvania.

Volatility in crude oil trading, which rose today on escalating Middle East tensions, is once again supporting the energy sector. ENI is up 1%, followed by oil services firm SAIPEM at +0.9%, while TENARIS retreats 0.44%.

Regarding decliners, the correction in the defense sector continues today with LEONARDO shedding 1.6%, while FINCANTIERI gains 0.7%.

Finally, cyclical stocks are trading in the red, with STELLANTIS, BREMBO, and PIRELLI all posting losses of around 1.8%.

(Giancarlo Navach, editing Antonella Cinelli)