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AI momentum and Fed signals drive record stock gains

US and global equities extended their rally midweek, fuelled by robust gains in technology shares and renewed optimism for further US interest rate cuts after the latest Federal Reserve (Fed) minutes pointed to a likely easing bias. The S&P 500 and Nasdaq indices surged to fresh all-time highs, with standout moves in semiconductor and AI-related stocks. Asian markets followed suit on Thursday, led by tech optimism and strong catch-up moves in China and Japan. Oil prices slipped as easing geopolitical fears accompanied news of a ceasefire agreement between Israel and Hamas. Gold and bitcoin were trading just below recent all-time highs, with gold around USD 4040 per ounce, and bitcoin near USD 122,000.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

Building of the Federal Reserve
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Fed meeting minutes released on Wednesday showed that officials remain inclined towards lowering interest rates further, with a narrow majority expecting two more cuts by the end of 2025. The central bank cited growing concerns about a weakening US labour market, while inflation is still anticipated to move towards the Fed’s 2% target. The policy committee voted 11-1 in September to cut the federal funds rate to a range of 4%–4.25%, but members differed on whether to reduce rates two or three more times over the next year. The minutes also highlighted the risk that a prolonged US government shutdown could hinder access to key economic data necessary for upcoming policy decisions.

US tech indices and S&P 500 reach new highs

The Fed's support for more rate cuts supported market sentiment, with US stock markets surging further on Wednesday as major technology indices and the S&P 500 reached record levels. The Nasdaq 100 climbed 1.2% to 25,136.62 points, the broader Nasdaq Composite advanced 1.1% to 23,043.38 points, and the S&P 500 finished 0.6% higher at 6753.72 points, while the Dow Jones Industrial remained flat but held its previous peak. Advanced Micro Devices led the Nasdaq 100, jumping over 11% following news of a substantial partnership with OpenAI. Gold mining stocks also rose sharply, following gold's recent price breakout.

Asian equities climb as tech outperforms

Most Asian stock markets ended higher on Thursday, led by gains in technology shares as continued enthusiasm for artificial intelligence lifted chipmakers and related sectors. Japanese indices approached record highs, with the Nikkei 225 up 1.5%, supported by rising government spending expectations. Mainland China’s CSI 300 gained 1.6% after reopening from a holiday, but Hong Kong’s Hang Seng lagged, adding just 0.3%, due to losses in health technology stocks following reports of Microsoft expanding into AI-driven healthcare. Australia’s S&P/ASX 200 was 0.3% higher. Korean markets remained closed for a holiday.

ABB sells robotics unit to SoftBank

Swiss engineering group ABB announced on Wednesday a USD 5.4 billion deal to sell its robotics division to Japanese technology investor SoftBank, abandoning earlier plans for a public listing of the unit. In 2024, ABB Robotics generated USD 2.3 billion in revenue, representing about 7% of ABB’s total sales, and employs roughly 7000 staff across facilities in China, Sweden and the US. ABB is the world’s second-largest industrial robotics maker behind Fanuc, with competitors including Kuka and Yaskawa. ABB stock gained 0.8% on Wednesday, while SoftBank shot up nearly 11% on Thursday.

EU steel tariffs hit carmakers' shares

Shares in Europe’s leading car manufacturers fell on Wednesday after the European Commission announced plans to reduce steel import quotas by 47% and double tariffs on excess imports to 50%. The move, aimed at protecting the steel industry, has stirred concern from the European Automobile Manufacturers’ Association, which warned of rising costs and inflationary pressure for automakers who source most of their steel within the EU. Germany’s BMW dropped 8.3% on Wednesday after issuing a profit warning, while rivals including Mercedes-Benz (-2.9%), Porsche (-2.1%) and Volkswagen (-1.9%) also declined. Broader European stock markets finished higher on Wednesday. The Euro Stoxx 50 rose 0.6%, Germany’s DAX advanced 0.9%, and France’s CAC 40 gained 1.1%. Switzerland’s SMI added 1%.

German industrial production slides in August

In macroeconomic data out of Europe, industrial production in Germany contracted by 4.3% in August 2025 compared with July, following a 1.3% rise in the previous month, according to data released on Wednesday. Output was 3.9% lower than in August 2024, driven mainly by marked declines in the automotive industry, which fell 18.5%, and machinery and equipment manufacturing, down 6.2%.

Israel and Hamas agree to initial peace deal

US President Donald Trump announced on Wednesday that Israel and Hamas have agreed to the first phase of a peace plan, aiming to end the two-year Gaza war and secure the release of hostages. The agreement, confirmed by both sides and mediator Qatar, is set to see around 20 Israeli hostages exchanged for nearly 2000 Palestinian prisoners, alongside an Israeli troop withdrawal to agreed positions. While the deal marks a significant diplomatic step, major issues including Hamas's possible demilitarisation and Gaza's future governance remain unresolved. The war, which began in October 2023, has resulted in over 67,000 deaths in Gaza and exacerbated instability across the Middle East. Oil prices retreated following the announcement: Brent crude was around USD 66.00 and West Texas Intermediate (WTI) near USD 62.25 per barrel.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from PepsiCo.

Economic data in focus: German trade balance (08:00), European Central Bank monetary policy meeting minutes (13:30), Federal Reserve Chair Jerome Powell speaks (14:30), US weekly initial jobless claims (14:30).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.