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AI-driven rally lifts US and Japanese stocks

A surge in enthusiasm for artificial intelligence pushed US technology shares to record highs on Monday, led by a major supply deal between AMD and OpenAI that fuelled gains across global chip stocks and supported strong advances in Japan’s Nikkei 225, which notched another record high on Tuesday. The upbeat momentum in tech helped offset concerns over the ongoing US government shutdown and a new bout of political uncertainty in France following the resignation of its prime minister, which weighed on European markets. The political instability drove gold prices to new highs with the yellow metal trading around USD 3960 per ounce. Bitcoin was also trading slightly below all-time highs, around USD 124,500.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

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US technology shares reached all-time highs on Monday as renewed enthusiasm for artificial intelligence (AI), spurred by a major chipset supply agreement between semiconductor firm AMD and ChatGPT developer OpenAI, lifted the Nasdaq 100 by 0.8% to 24,978.56 points. AMD surged nearly 24% following news of a multi-year supply deal expected to generate tens of billions of US dollars, which also buoyed shares of suppliers Lam Research and Applied Materials, though competitor Nvidia slipped more than 1%. Meanwhile, the broader S&P 500 gained 0.4% while the Dow Jones Industrial dipped 0.1%, as investors looked ahead to the upcoming earnings season with optimism that major tech firms will exceed low profit forecasts. However, a continued US government shutdown weighed on sentiment by delaying economic data releases and raising concerns about public sector redundancies due to a lack of agreement in Congress.

Japanese Nikkei hits record again

The Nikkei 225 in Japan reached a new record high for the second consecutive session on Tuesday, fuelled by gains in technology shares after AMD’s significant deal with OpenAI drove upward momentum in global chip stocks. Companies such as Advantest, Renesas Electronics and Tokyo Electron shot up, supporting the index’s 0.3% rise. Japanese government bond yields increased to multi-year highs and the yen weakened against the US dollar for a fourth straight session, reflecting ongoing shifts in the country’s economic outlook. Elsewhere in Asia there was little activity with equity markets as markets in China, Hong Kong and South Korea were closed due to holidays.

French prime minister resigns after 27 days

France entered a new period of political turmoil on Monday as Prime Minister Sebastien Lecornu resigned just 27 days after his appointment, making him the shortest-serving premier in the country’s history. Lecornu’s departure follows his failure to unify a divided parliament and to advance the 2026 budget, exacerbating concerns among investors about France's ability to address its budget deficit, which stood at 5.8% in 2024, and its public debt, which reached 113% of GDP. Financial markets reacted negatively, with the CAC 40 index dropping 1.4%, the euro weakening against the US dollar, and yields on French government bonds rising. President Emmanuel Macron now faces intense pressure to choose a new prime minister, call fresh parliamentary elections, or resign.

Swiss unemployment stable despite economic headwinds

Switzerland’s unemployment rate remained unchanged at 2.8% in September, State Secretariat for Economic Affairs (SECO) data showed on Monday, despite an increase of 1,128 jobless individuals from August, for a total of 133,233. Compared with the same period last year, the number of unemployed surged by 17.7%, as tariffs imposed by the United States contributed to a weakening economic environment. Seasonally adjusted figures indicated a slight rise in the unemployment rate to 3.0%, while youth and older worker unemployment rates held steady at 3.2% and 2.5% respectively. The total number of jobseekers rose to 213,750 in September, up 2.2% from August, and benefit exhaustions in July climbed nearly 39% from June. The Swiss Market Index outperformed regional peers on Monday, climbing 0.4%.

Euro-area retail trade rises slightly in August

Seasonally adjusted data released on Monday show the volume of retail trade in the euro area increased by 0.1% in August 2025 compared to July, after declining by 0.4% in July. In the European Union as a whole, retail trade volume was stable following a 0.3% drop in July. Compared to August 2024, retail sales grew by 1.0% in the euro area and by 1.1% in the EU, primarily driven by stronger sales of non-food products and automotive fuel. The Euro Stoxx 50 slipped 0.4% on Monday.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: German factory orders (08:00), French trade balance (08:45), Swiss foreign currency reserves (09:00), US trade balance (14:30), Canadian trade balance (14:30) and European Central Bank President Christine Lagarde speaks (18:10).

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Editor: Alessandro Fezzi
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