By Jamie McGeever
ORLANDO, Florida (Reuters) – TRADING DAY
Diving into the dynamics shaping global markets
By Jamie McGeever, Markets Columnist
On Thursday, stock exchanges worldwide soared to unprecedented heights, fueled by enthusiasm surrounding the AI surge and anticipation of potential reductions in U.S. interest rates, as investors dismissed the ongoing government shutdown that has now reached its second day.
More insights below. In today’s column, I discuss how the U.S. government shutdown is the last situation the Federal Reserve requires at this juncture—visibility on labor market and inflation data is already scarce, and this event further obscures the picture.
If you have some extra time, here are a few recommended readings to help clarify today’s market activities:
1. As the U.S. government remains closed, alternative sources indicate a sluggish job market in September. 2. A prolonged shutdown of the U.S. government could heighten market risks. 3. A sign of the times: Swiss investors are favoring euros over dollars, highlights Mike Dolan. 4. OpenAI reaches a valuation of $500 billion post share sale to SoftBank and others, according to sources. 5. Despite a cloudy growth outlook, China’s ‘new economy’ continues to shine: Raychaudhuri
Highlights of Today’s Market Moves
* STOCKS: New record highs for the S&P 500, Nasdaq, global stocks, Europe, the eurozone, Britain, South Korea, and Taiwan. The MSCI All Country index has risen in 18 of the last 22 trading sessions. * SHARES/SECTORS: The top gainer in the S&P 500 is materials, up 1%; the largest loser is energy, down 1%. The broader semiconductor index surged 2%. Coinbase shares increased by 7%, while Tesla fell by 5%. * FX: The U.S. dollar broke a four-day losing streak, gaining significantly against NOK as oil prices dipped. Bitcoin reached a 10-week high of over $121,000. * BONDS: U.S. Treasury yields eased to two-week lows amid thin trading dominated by the shutdown. The curve experienced a mild flattening of a few basis points. * COMMODITIES: Oil prices fell an additional 2% to new four-month lows, while gold and silver reached fresh peaks.
Key Discussions Today:
* Is the AI Emperor wearing any clothes?
OpenAI, the creator of ChatGPT, has achieved a staggering valuation of $500 billion following its recent share sale, establishing itself as the most valuable private firm globally. This reflects a significant jump from its previous $300 billion valuation. What’s next? A possible $1 trillion?
This milestone prompts familiar concerns regarding the sustainability of the AI boom. While AI-related capital expenditure in the U.S. is surging, much of it pertains to imports, thus merely offsetting GDP growth. The bar for future returns remains high. Nevertheless, as long as the momentum continues, investors will remain engaged.
* Analyzing the decline in oil prices
Oil prices are plummeting rapidly. Both Brent and WTI crude futures have dropped nearly 10% over the past week, reaching four-month lows of $64.00 and $60.40 per barrel, respectively, due to mounting concerns over oversupply.
