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US stocks hit records, Asian markets retreat

Wall Street indices surged to fresh highs on Monday, driven by renewed optimism surrounding US-China trade talks and robust gains in leading technology shares, while European stocks also advanced to new peaks. In contrast, Asian markets traded lower on Tuesday as investors digested President Trump’s meeting with Japan’s new prime minister and shifted focus to pivotal central bank policy decisions later this week. The US dollar eased against major currencies on Tuesday as traders anticipated key central bank decisions: The yen strengthened over 0.6% against the US dollar as markets expect the Bank of Japan (BOJ) to keep rates unchanged but possibly hint at future increases, while the euro reached a one-week high. Gold prices retreated, trading around USD 3960 per ounce, while bitcoin was down and hovering near USD 113,800.

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

Mixed markets
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US stock markets extended their record rally on Monday as hopes for an imminent resolution to the trade dispute with China boosted sentiment, particularly among leading technology firms. The Dow Jones Industrial Average climbed 0.7% to 47,544.59 points, while the S&P 500 and Nasdaq 100 both continued their upward momentum from Friday, rising by 1.2% and 1.8% respectively. Tesla led the so-called “Magnificent Seven” tech giants with a 4.3% increase, as all major US tech firms advanced. Comments from officials in both countries indicated that a preliminary trade agreement is undergoing internal approval, easing fears of further tariffs, while the prospect of Chinese export controls on rare earths pressured shares of relevant US suppliers. Shares of US chipmaker Qualcomm climbed over 11% on Monday following the unveiling of its new AI200 and AI250 processors, marking the company’s entry into the rapidly expanding data centre AI segment.

Asian equities weaken ahead of key policy decisions

Most Asian stock markets declined on Tuesday as investors digested the meeting between US President Donald Trump and Japanese Prime Minister Sanae Takaichi, while attention shifted to upcoming Federal Reserve and BOJ policy announcements. Trump reaffirmed the alliance with Japan during a meeting in Tokyo with Takaichi, offering strong support for her plans to increase defence spending. The leaders signed documents intended to formalise trade and critical minerals cooperation, though details remained vague, with both sides expressing ongoing commitment rather than defining clear terms. Japan’s Nikkei 225 was trading 0.7% lower on Tuesday, Korea’s Kospi declined 0.8%, and Australia’s S&P/ASX 200 lost 0.5%. Sentiment was supported by progress in US-China trade talks, as negotiators finalised a draft agreement to prevent new tariffs, with leaders expected to review it later in the week. Hong Kong’s Hang Seng Index slipped 0.4%, while mainland China’s CSI 300 dipped 0.4%.

EuroStoxx 50 reaches new high on optimism

Prospects of a US-China trade deal propelled several European stock indices to record levels on Monday, with the EuroStoxx 50 climbing 0.6% to 5710.45 points, surpassing the 5700 mark for the first time. Banking and technology shares were notably strong, echoing gains seen on Wall Street. Germany’s DAX rose 0.3% and France’s CAC 40 gained 0.2%. Spain’s Ibex 35 approached all-time highs with a 0.9% rise. Swiss pharmaceutical stocks weighed on the SMI, which slipped 0.3%.

German business sentiment improves in October

The ifo Business Climate Index for Germany ticked up to 88.4 points in October, compared to 87.7 points in September, supported by brighter business expectations despite a more subdued assessment of current conditions. Manufacturing and the service sector both registered improvements, with capacity utilisation in manufacturing rising slightly, although remaining below the long-term average. Sentiment in construction weakened marginally as pessimism over future orders persisted, while trade benefited from less negative forecasts, especially in wholesale. The survey, released on Monday, suggests that German companies are increasingly hopeful for a gradual economic upturn over the coming months.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from BNP Paribas, Booking Holdings, Electronic Arts, HSBC Holdings, Logitech, NextEra Energy, Novartis, PayPal, Regeneron Pharmaceuticals, United Parcel Service, UnitedHealth Group, and Visa.

Economic data in focus: German GfK Consumer Climate (08:00), ECB Bank Lending Survey (10:00), Conference Board Consumer Confidence Index (15:00) and Richmond Fed Manufacturing Index (15:00).

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Editor: Alessandro Fezzi
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