The US stock market rises on falling oil prices and bond yields, while investment in AI-related tech stocks remains robust despite macroeconomic uncertainties.
Falling oil prices and a decline in the US 10-year Treasury yield to 5.28% have fueled a stock market rebound. If the S&P 500 index maintains its current upward trend, it is projected to close at an all-time high for the first time since August.
Amidst this market sentiment, the US 10-year Treasury yield fell to 5.28%, contributing to improved investor confidence.
Nvidia's annual stock price surge reached 28%, bringing its market capitalization close to $6 trillion. Despite macroeconomic uncertainties, investors continue to buy, suggesting that the AI investment cycle remains robust.
Nvidia's market capitalization is on the verge of surpassing $6 trillion, with its annual stock price up 28%. The market interprets this as the AI investment cycle remaining strong despite macroeconomic uncertainties.
Alphabet entered a 20-year agreement with Constellation Energy to purchase 890 MW of nuclear power. As AI data center power consumption surges, the competition among Big Tech has shifted from securing chips to securing power.
Alphabet signed a 20-year contract to purchase 890 MW of nuclear power from Constellation Energy, aiming to stabilize power supply for its data centers. This demonstrates that securing power has emerged as a new key challenge for Big Tech.
Reports indicate that borrowing costs for low-rated companies with credit ratings of CCC or lower have soared to 17%.
Credit spreads widened from 11% on September 25 to over 12% on October 1, with rising Treasury yields and surging risk premiums exacerbating the burden of refinancing costs.
Defaults in the private lending market, coupled with high interest rates, have emerged as a financial instability factor. The New York Fed is investigating the private lending exposure of major banks like JP Morgan and Wells Fargo, assessing the potential for systemic contagion.
The New York Fed is closely monitoring the potential for non-performing assets in the private lending market to act as a potential source of financial instability, especially in conjunction with high interest rates.
Marine Le Pen unveiled a 'shadow budget' ahead of next year's presidential election, with a key focus on reducing the fiscal deficit.
Consequently, the French 10-year Treasury yield dropped by 10 basis points in one day to the 4.7% range, reflecting a positive market reaction.
Indeed, China's holdings of US Treasuries have more than halved since 2013, and Japan also sold $12.8 billion in US Treasuries in July alone.
Concerns about a 300,000 barrels per day reduction in global refining capacity outside of China and war damage to Middle Eastern and Russian refining facilities are cited as key reasons for this margin surge.
This is based on the expectation that the adoption of agentic AI will lead to a surge in CPU demand and CPUs becoming a new bottleneck for AI, expanding server CPU customers like Meta.
Nvidia's forward 12-month P/E ratio is 17x, lower than the S&P 500's market average of 19x, highlighting its valuation attractiveness.
Revenue is expected to grow by 90% and net income to double by 2027, with earnings growth outpacing stock price appreciation. A $150 billion share buyback plan has also been announced.
This is part of Big Tech companies' proactive strategy to secure stable power sources essential for running AI servers.
The mega-merger of Paramount and Warner Bros. Discovery, valued at $10 billion, was finalized after the US Supreme Court rejected a request to block the merger.
The integrated media group, encompassing diverse content from CBS, CNN, HBO, Warner Bros., and DC, will launch, facing a $30 million penalty per film if it fails to release at least 30 films annually over the next two years. This is expected to create a three-way competition with Netflix and Disney.
Underwriting revenues from IPOs and corporate bond issuance surged 68% year-over-year, and increased market volatility led to higher trading profits, with bonuses expected to reach a record high early next year.
Chinese AI company Moonshot AI recently completed its final private investment round, with its current valuation estimated at $50 billion (approximately 70 trillion won). This represents a 60% increase in value in just a few months.
Moonshot AI plans to raise up to $5 billion through an IPO on the Hong Kong stock exchange in Q1 2027, and its annual recurring revenue (ARR) is expected to reach $2 billion by the end of this year.
An uptrend was observed across financial markets, with S&P 500 index futures and Nasdaq 100 index futures rising by 0.63% and 0.67% respectively.
This is attributed to declining oil prices and rising bond prices, coupled with strong performances from major tech stocks like Nvidia (1.21%), Broadcom (3.24%), and AMD (2%), leading to a spread of risk-on sentiment.
Major tech stocks showed strength, including Nvidia up 1.21%, Broadcom up 3.24%, AMD up 2%, Microsoft up 1.4%, Tesla up 0.65%, and Amazon up 0.7%.
Despite a high-interest-rate environment, the AI investment cycle shows no signs of slowing, and with expectations that benefits will expand beyond GPUs to CPUs, the overall market sentiment has shifted towards risk-on.
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