Markets Overview
- ASX SPI 200 futures little changed at 9,015.00
- S&P 500 up 0.4% to 6,741.84
- Dow Average down 0.1% to 46,708.58
- Aussie up 0.2% to 0.6617 per US$
- US 10-year yield rose 4.5bps to 4.1637%
- Australia 3-year bond yield little changed at 3.55%
- Australia 10-year bond yield little changed at 4.33%
- Gold spot up 1.9% to $3,961.29
- Brent futures up 1.6% to $65.55/bbl
Economic Events
- 10:30: (AU) Oct. Westpac Consumer Conf SA MoM, prior -3.1%
- 10:30: (AU) Oct. Westpac Consumer Conf Index, prior 95.4
- 11:30: (AU) Sept. ANZ-Indeed Job Advertisements , prior 0.1%
New Zealand’s central bank is expected to cut interest rates Wednesday but economists are divided over how aggressively it will respond to the weak economy.
A rally in chipmakers sent stocks to all-time highs as Advanced Micro Devices Inc.’s deal with OpenAI added fuel to the artificial-intelligence frenzy that has powered Wall Street. Bonds fell. The dollar rose.
With the bull market on track for its three-year anniversary, momentum shows few signs of abating. The S&P 500 climbed for a seventh straight session – the longest advance since May. AMD soared 24%. While giant Nvidia Corp. slid, a key gauge of semiconductors jumped about 3%. Tesla Inc. led gains in megacaps as a series of social-media posts teased the unveiling of a product.
Monday’s AMD deal is the latest big-budget data center agreement this year. It follows last month’s announcement that Nvidia was planning to invest as much as $100 billion in OpenAI amid demand for tools like ChatGPT and the computing power needed to make them run.
“Semiconductors are ‘on fire’,” said Louis Navellier at Navellier & Associates. “The AI narrative continues to gain momentum.”
With “animal spirits” surrounding the AI phenomenon getting yet another boost, Matt Maley at Miller Tabak notes it’s no surprise that issues like the US government shutdown are being mostly ignored by traders.
The S&P 500 closed around 6,740. Comerica Inc. soared as Fifth Third Bancorp agreed to buy the bank for about $10.9 billion in stock. AppLovin Corp. sank as it was said to be probed over its data-collection practices.
Long-term Treasuries underperformed, joining a similar trend through much of Europe and Asia amid fiscal concerns. Gold neared $4,000-an-ounce. Bitcoin also hit a record. Oil gained as OPEC+ raised production by a modest amount.
For almost as long as the AI boom has been in full swing, there have been warnings of a speculative bubble that could rival the dot-com craze of the late 1990s that ended in a spectacular crash and a wave of bankruptcies.
There was some fear that an AI bubble had already popped in late January, when China’s DeepSeek upended the market with the release of a competitive AI model. But Silicon Valley remained largely undeterred. In the months that followed, tech companies redoubled their AI spending plans, and investors resumed cheering on these bets.
“When the tech bubble in the stock market inflated during 1999, we don’t recall as much chatter about a bubble as we are hearing today. From a contrarian perspective, it is comforting that there is a bubble in bubble fears,” said veteran Wall Street strategist Ed Yardeni.
The founder of Yardeni Research noted that the Google search index for “AI bubble” rose to 100 on Oct. 2 from zero in mid-September.
“We are counting on another better-than-expected earnings reporting season for Q3 over the next few weeks to support the stock market’s rally to record highs,” Yardeni said. “In addition, we expect that the AI and cloud companies won’t disappoint either.”
