Global markets traded mixed on Wednesday as optimism over a possible end to the record US government shutdown lifted financial and cyclical stocks while weighing on stretched technology names. European and Asian equities followed Wall Street’s lead, with gains in financials and energy offset by weakness in technology amid renewed caution over valuations.
US equity indices diverged on Wednesday as investors bet on an imminent end to the record 43-day US government shutdown, prompting a rotation out of big tech and into financial and industrial names. The DOW rose +0.9% to a fresh record high, while the S&P 500 gained +0.2% and the NASDAQ dipped -0.3% as megacap tech stocks lost ground, offsetting gains elsewhere. Financial heavyweights Goldman Sachs (+2.9%) and JPMorgan (+1.9%) hit new records, while cyclicals such as Caterpillar (+1.8%) also advanced on shutdown optimism. AMD jumped +8.9% after outlining robust long-term growth targets at its investor day, forecasting a +60% rise in data centre revenues within five years. However, other AI-linked giants—NVIDIA (-0.2%), Amazon (-1.4%), Apple (-0.2%), and Tesla (-1.8%)—slipped as investors took profits amid concerns over elevated tech valuations. A weak private payrolls report bolstered expectations of a Federal Reserve rate cut next month, helping Treasury yields edge lower, with the US two-year yield dropping -3bp to 3.560% and the 10-year yield falling -5bp to 4.062%.
European equities closed higher on Wednesday amid optimism that the prolonged US government shutdown could soon end, lifting global growth sentiment. The STOXX 600 rose +0.7%, with most major bourses and sectors in positive territory. Germany’s DAX gained +1.2%, France’s CAC 40 climbed +1.0%, while the UK’s FTSE 100 edged higher +0.1%. Energy stocks led gains, with SSE surging +16.8% after announcing a £2 billion equity raise to fund a five-year £33 billion investment plan to upgrade the UK’s electricity network. Infineon Technologies rose +6.9% after reporting full-year revenues of €14.6 billion, in line with expectations.
Regional Asian benchmarks were mixed as renewed concerns over lofty tech valuations and signs of a cooling US labour market tempered sentiment. China’s Shanghai Composite slipped -0.1% as investors awaited key October data. Hong Kong’s Hang Seng advanced +0.8% after the People’s Bank of China pledged to maintain ‘appropriately loose’ monetary policy. Japan’s Nikkei 225 rose +0.4%, though gains were capped after Finance Minister Satsuki Katayama warned on yen weakness, with the currency nearing the key ¥155 per US dollar level. SoftBank (-3.5%) weighed on sentiment after selling its entire stake in NVIDIA, reigniting concerns over stretched AI valuations. South Korea’s Kospi gained +1.1% as autos and energy led, with Hyundai Motor up +2.4%. Australia’s ASX 200 dipped -0.2% as Commonwealth Bank (-3.1%) extended losses, while Aristocrat Leisure fell -7.5% on a softer-than-expected result. Across the Tasman, the NZX 50 rose +0.5% to a record high, boosted by Mainfreight’s (+6.8%) positive outlook.
WTI crude fell -4.1% to US$58.53/bbl, gold rose +1.8% to US$4,201.79/oz, and iron ore inched down -0.4% to US$103.56/MT.