Global markets were mixed as US stocks rose on optimism surrounding AMD’s new partnership with OpenAI, while European shares were weighed down by political uncertainty in France. In Asia, Japan hit a record high following leadership changes, while Hong Kong, Australia, and NZ traded lower amid cautious sentiment.
US stock markets rose on Monday, led by gains in technology shares following news of a major partnership between AMD and OpenAI, prompting investors to largely look past the ongoing US government shutdown. The S&P 500 climbed +0.4% and the NASDAQ advanced +0.7%, while the DOW slipped -0.1%, dragged down by declines in Verizon. AMD surged +27.1% after announcing a multiyear partnership with OpenAI that could see the ChatGPT maker acquire up to a 10% stake in the chipmaker, weighing on rival Nvidia (-1.1%). Verizon dropped -5.1% following CEO Hans Vestberg’s resignation, with former PayPal chief Dan Schulman stepping in as replacement, while Starbucks fell -4.3% amid store closures and layoffs under its ‘Project Bloom’ turnaround plan. Investors continued to look past the prolonged shutdown, instead focusing on the AI-driven market optimism and comments expected this week from Fed officials, including Governor Stephen Miran and Chair Jerome Powell. Treasury yields were little changed as markets awaited fresh data amid the ongoing government data blackout, with the US two-year yield inching up +3bp to 3.579% and the US ten-year yield rising +4bp to 4.162%.
European markets closed mixed on Monday as political uncertainty in France rattled investors following the sudden resignation of Prime Minister Sebastien Lecornu, reigniting concerns over the country’s stability. The STOXX 600 was flat as the UK’s FTSE 100 slipped -0.1% and Germany’s DAX finished flat, while France’s CAC 40 fell -1.4% despite early losses. Bank stocks led declines, while UK miners and energy firms found support from higher commodity prices. Shares of UK paper and packaging company Mondi slumped -16.0% after warning of weak demand and falling pulp and paper prices.
Asian markets were mixed on Monday, with only Japan and Hong Kong trading amid regional holidays. Japan’s Nikkei 225 jumped +4.8% to a record high after pro-business leader Sanae Takaichi won the Liberal Democratic Party leadership race, boosting hopes of continued stimulus, while the yen weakened to its lowest since August. Hong Kong’s Hang Seng slipped -0.7% amid light trading. In Australia, the ASX 200 edged -0.1% lower as losses in technology, led by WiseTech (-2.2%), offset gains in gold and copper miners. Bullion hit a record high of US$3,929.9/oz, driving Newmont up +2.3% and Evolution Mining +2.6% as strong metal prices buoyed the resources sector. In New Zealand, the NZX 50 fell -0.2%, with Freightways down -2.6%.
WTI crude rose +1.4% to US$61.75/bbl, while gold gained +1.9% to US$3,959.09/oz on continued safe-haven demand. Iron ore also inched up +0.2% to US$104.36/MT.