United States
Wall Street extended its rally overnight as investors piled back into equities, driving the S&P 500 to fresh all-time highs amid renewed optimism in the artificial intelligence sector. The index rose 0.6% to 6,753.92, while the Nasdaq 100 gained 1.2%, led by megacaps Nvidia and Apple. The Dow Jones was little changed. Traders brushed off concerns about overvaluation, viewing recent dips as buying opportunities.
Nvidia’s CEO Jensen Huang told CNBC that demand for its Blackwell chips remained high, lifting semiconductor and AI-linked names. Cisco also gained after unveiling a new networking system to link AI data centres across vast distances, intensifying competition with Broadcom.
The Federal Reserve minutes reinforced expectations for two more rate cuts this year, though several officials expressed caution over inflation risks. Analysts at Wells Fargo and LPL Financial noted that policymakers remain data-dependent and mindful of tariff effects, with suggestions that AI’s impact on labour demand is now entering Fed discussions. Despite a mild pullback earlier in the week, investors continue to “buy the dip,” with strategists at Goldman Sachs and UBS downplaying bubble fears, citing earnings strength and more reasonable valuations compared with the dot-com era.
In corporate headlines, Elon Musk’s xAI raised US$20 billion from backers including Nvidia, while SoftBank announced a US$5.4 billion acquisition of ABB’s robotics unit. BMW lowered guidance on weaker China sales and tariffs, while Verisure surged on its debut in Europe’s largest IPO in three years.
Europe
European markets rallied, with the Stoxx 600 up 0.8% to a record high as optimism grew that France’s budget impasse could be resolved by year-end. Banking and luxury names led gains, while autos lagged after BMW’s profit warning weighed on the sector.
Banks rose 1.4%, supported by strong moves in HSBC, Santander, and Lloyds. Insurers gained 1.2%, with Allianz, AXA, and Swiss Re advancing on robust earnings momentum. Meanwhile, industrial stocks like Siemens and Safran hit record closes on upbeat growth expectations.
The standout was basic resources, jumping 1.9% as gold’s surge above US$4,000 an ounce boosted miners. ArcelorMittal soared 6.5%, with Anglo American and Rio Tinto also higher. Luxury majors LVMH, Richemont, and Hermès rallied up to 3%, extending their recovery since March.
Technology underperformed as ASML and Capgemini slipped, while Puma jumped almost 7% after a Bank of America upgrade. Real estate lagged, with Unite Group plunging 10% on weak UK student demand.
The FTSE 100 added 0.7%, and Germany’s 10-year yield eased three basis points to 2.68%. Optimism around fiscal stability and gold-related demand underpinned sentiment across the region.
Australia
Australian shares are expected to open higher, following Wall Street’s lead and the strength in commodities. ASX 200 futures were up 38 points, or 0.4%, to 9,009, positioning the index within reach of record highs.
Investors will be watching gold and silver miners, as both metals surged overnight, and energy stocks may see follow-through from rising oil prices. Local focus will also be on REA Group’s AGM and ongoing corporate updates.
In company news, Lynas Rare Earths signed an accord with Noveon to produce rare-earth magnets, while Insurance Australia Group drew attention after reports that Japan’s Tokio Marine is eyeing more than US$10 billion in international M&A deals.
Goldman Sachs reinstated buy ratings on ANZ Group, while maintaining sell calls on CBA and NAB. Canaccord and Morgans also upgraded Metals X and Imdex, respectively.
Australian government bond yields eased, with the 10-year at 4.36% and the 3-year at 3.56%, while the Aussie dollar held steady at US65.9¢.
Commodities and currencies
Gold surged past US$4,000 an ounce for the first time, extending its record-breaking run as geopolitical tensions and expectations of Fed rate cuts drove safe-haven demand. Spot gold settled 1.5% higher at US$4,045, while silver climbed 2.4% to US$48.67, and platinum advanced 2.4% to US$1,669.
Oil prices edged higher, with Brent crude up 1.1% to US$66.25 a barrel and WTI at US$62.39, supported by rising US consumption and expectations that sanctions will continue to restrict Russian supply.
The Bloomberg Dollar Spot Index rose 0.1%, with the euro down 0.2% to US$1.1630, the pound at US$1.3402, and the yen weakening to 152.7 per dollar. Bitcoin rose 1.1% to US$123,375, and ether remained flat around US$4,512.
Economic Calendar
US (*May be Impacted by US Gov Shutdown) :
- Initial Jobless Claims Oct 22:30
- Wholesale Inventories MoM Aug 01:00
- Uni of Michigan Sentiment 01:00
This article was written by James Woods, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
