Latest News

Stock indices mostly rise with tech shares, but euro and yen fall on fiscal concerns

The major stock indexes rose on Monday. Technology shares gained after AMD announced a deal to supply AI chips with OpenAI. Meanwhile, the Japanese yen, the euro and the French franc fell against the dollar as the ruling party in Japan elected a new president and the new government in France resigned.

Bitcoin was near its all-time high on Monday as investors turned to alternative assets for a safe haven of value, as uncertainty over the U.S. shutdown kept them uncertain. The cryptocurrency last rose 1.61% to $124,755.87. The euro fell 0.2% to $1.1717. Sebastien lecornu, the new French prime minister, resigned Monday just 14 hours after his cabinet was appointed. Sanae Takaichi was chosen by Japan's ruling party as the country's first woman prime minister. The yen declined also after this decision. She supports the "Abenomics", a strategy of aggressive spending and easy money to boost the economy, which was developed by late prime minister Shinzo Abe. Wall Street saw the S&P 500, Nasdaq and Dow rise, while the Dow fell slightly, as the U.S. government shutdown that began last week continued. Last week, the S&P 500 closed at a record high.

The market has extended its momentum bias. The market is ignoring the government shutdown in the United States and because of this, it's believed that the Fed will be more generous than what the market had expected. Federal Reserve rates are widely expected to be cut again by 25 basis point at their October 28-29 meeting. This is due to data showing a weakening of the labor market.

Cardillo also said that "we are not far from the third-quarter earnings and it looks like it will be another good earning season."

Stocks of other chip makers also rose on the back of optimism surrounding artificial intelligence deals.

The Dow Jones Industrial Average dropped 76.88, or 0.1%, to 46.681.40. The S&P 500 rose 18.99 points, 0.28% to 6,734.64 while the Nasdaq Composite rose by 113.40, or 0.5%, to 22893.90.

The MSCI index of global stocks rose by 2.57 points or 0.26 percent to 995.78. The pan-European STOXX 600 rose by 0.02%.

Since Emmanuel Macron was re-elected in 2022, French political instability has increased. No party or group holds a parliamentary majority.

Michael Brown, Senior Research Strategist at Pepperstone, said: "The market's biggest concern is what happens next. If Macron decides to name another PM, that will be the sixth Prime Minister in two years."

Brown said that any newcomer to parliament would have the same arithmetic problems and challenges when attempting to pass a budget. The Nikkei rose above 48,000. This was the first time that Takaichi had beaten the more moderate Shinjiro. Koizumi, in the Liberal Democratic Party leadership vote.

The yields of short-dated Japanese government bonds fell to their lowest level in two weeks as traders reduced bets about when the Bank of Japan would resume raising interest rates.

The majority of other major stock markets in the region, such as mainland China, South Korea, and Taiwan, were closed on holidays. Gold reached a new high of over $3,900 an ounce. This was aided by the political and economic uncertainty in the U.S.A., France, and Japan. Spot gold increased 1.83%, to $3.957.25 per ounce.

U.S. crude oil rose by 1.3%, to $61.67 per barrel. Brent was up to $65.47 a barrel on the same day. (Kevin Buckland, Tokyo; Lucy Raitano, London; Alison Williams and Nick Zieminski edited the article.)

(source: Reuters)