Wall Street hits new peaks on tech and AI optimism
Investor confidence in artificial intelligence and major tech companies led US equity markets to new highs on Wednesday. The S&P 500 gained 0.6%, closing at 6,753.7, while the Nasdaq climbed 1.1% to finish at 23,043.4, both setting fresh record closes.
The Dow Jones Industrial Average, meanwhile, remained relatively flat at 46,601.8. The rally was driven largely by gains in tech shares, including Advanced Micro Devices (AMD), which surged 11%, and Nvidia, up 2.2%.
Analysts predict a strong earnings season
According to analysts at Wedbush Securities, the upcoming earnings season for the tech sector looks “very strong,” reinforcing investor enthusiasm.
Federal Reserve signals rate cuts
Minutes from the Federal Reserve’s September meeting revealed that most policymakers expect additional interest rate cuts by year-end. While there are differing views on timing, the outlook for looser monetary policy helped sustain positive market sentiment.
Global markets react positively to Wall Street momentum
Global equities followed Wall Street’s lead, with gains in Asia and Europe reflecting strong tech and industrial momentum.
Asian markets post gains, led by Japan and China
Asian equity markets opened higher today, with Japan’s Nikkei and TOPIX approaching record levels. Mainland Chinese markets rallied following their post-holiday reopening. However, Hong Kong’s Hang Seng underperformed due to declines in health tech shares and HSBC.
European stocks rally on banking and industrial strength
European stocks, including the STOXX 50 and STOXX 600, climbed 0.8%, buoyed by gains in major banks such as Santander, UniCredit, and AXA, as well as industrial giants like Siemens, Hermes, and Safran. Steelmakers ArcelorMittal and ThyssenKrupp also jumped, offsetting declines in the auto sector.
Currency and commodities update
Key market movers in currencies and commodities reflect investor positioning amid economic uncertainty and geopolitical shifts.
US dollar remains firm amid global uncertainty
The US dollar traded just under 98.8, maintaining near two-month highs. Political tension in France and the ongoing US government shutdown contributed to safe-haven demand, pushing the dollar higher, particularly against the euro and yen. The dollar gained nearly 1% against the euro, now trading at 1.1645, and rose more than 3% versus the yen this week.
Oil prices dip despite strong demand
Oil prices eased in Asian trading, with Brent crude slipping 0.6% to $65.86 and WTI down 0.7% to $62.10. Rising US crude inventories, up 3.7 million barrels, and improving geopolitical sentiment around Gaza ceasefire talks helped reduce price pressures, despite falling fuel stockpiles and steady demand. Production forecasts for 2025 were also raised to a record high.
Geopolitical developments: US-brokered Gaza peace deal
The US government announced a peace agreement between Israel and Hamas, including a phased Israeli withdrawal from Gaza and the release of hostages. The proposed plan involves the creation of a transitional government, Hamas disarmament, and the establishment of a special economic zone for Gaza’s reconstruction. All hostages are expected to be released by Monday under the deal.
Central bank outlook: Fed minutes support dovish tilt
Recent FOMC minutes confirmed that the Federal Reserve plans to reduce interest rates further amid a softer labour market and cooling inflation pressures. The Fed has already cut the benchmark rate to a range of 4.00% to 4.25%, marking the first cut in nine months. Officials anticipate modest labour market changes and expect tariff-driven inflation pressures to persist into next year.
Key corporate movements and analyst ratings
A round-up of notable corporate announcements, earnings, and analyst insights shaping market dynamics.
AI, tech, and semiconductor highlights
SoftBank will acquire ABB’s robotics division for $5.4 billion, advancing its AI integration strategy. ABB, which had initially planned to spin off the unit, will instead focus on electrification and automation.
Nvidia CEO Jensen Huang stated the US is “not far ahead” of China in AI development. He praised the H-1B visa system, expressed regret over not backing OpenAI and xAI earlier, and highlighted strong demand for Blackwell chips.
Cisco launched new Silicon One P200 chips and 8223 routers designed to improve long-distance AI data centre connectivity. The products directly compete with Broadcom in the expanding AI networking space.
Morgan Stanley remains bullish on TSMC, forecasting 2025 revenue growth of 32 to 34 percent, potentially exceeding 35 percent, driven by AI chip demand. The bank also anticipates high fab utilisation and possible price increases in 2026.
China tightened export controls on rare earth processing technologies, expanding restrictions to more magnet types and components. The new rules limit overseas cooperation and require licensing for exports to the semiconductor and defence industries. The Ministry of Commerce aims to balance strategic resource protection with controlled licensing flexibility.
Goldman Sachs noted the current tech and AI rally is grounded in fundamental growth, but also exhibits traits of past bubbles, such as elevated valuations and concentrated leadership. The bank stressed the need for portfolio diversification amid increasing competition and evolving market risks.
Consumer and retail updates
Netflix is reportedly nearing a deal with Warner Music Group to develop music-based films and documentaries. The partnership aims to showcase Warner’s artist catalog and untold stories globally.
Costco posted 8% year-on-year growth in September sales, with net sales reaching $26.58 billion. Comparable US sales (excluding fuel and FX) rose 5%, while Canadian and international markets increased 9.3% and 7.5% respectively. E-commerce sales jumped 26.1%, highlighting strength ahead of the holiday season.
Coca-Cola will introduce 222 ml single-serve cans priced at $1.29 in US convenience stores, targeting budget-conscious and calorie-aware consumers. The company also plans to launch cane sugar-sweetened glass bottles later.
Disney announced plans to raise US theme park ticket prices during peak holiday periods such as Thanksgiving and New Year’s Eve, starting in 2026. Walt Disney World one-day tickets will surpass the current $199 cap, while most Disneyland tiers will increase by 3% or less. The lowest-priced ticket will remain at $104.
Healthcare, energy, and industrial
The FDA approved Regeneron’s Libtayo for adults with high-risk skin cancer following surgery and radiation. Clinical trials showed a 68% reduction in recurrence or mortality. The treatment received priority review and is now available with detailed safety and usage guidance.
Chevron expects to exceed its financial targets following the $55 billion acquisition of Hess. The deal, completed in July, is projected to deliver $1 billion in synergies and raise 2026 free cash flow guidance from $10 billion to $12.5 billion.
Salesforce announced a $1 billion investment in Mexico over five years, including the launch of a new Global Delivery Center in Mexico City. The initiative supports AI skills development, local job creation, and regional consultancy expansion.
Analyst actions: Upgrades, downgrades, and price targets
Investment banks issued new ratings and targets, with notable changes in tech, industrials, and commodities.
Citi upgraded Freeport-McMoRan to Buy, citing copper prices projected to reach $12,000 per ton by early 2026. The bank maintained its $48 price target, viewing recent operational setbacks as temporary, with production expected to recover.
Stifel raised Tesla’s price target from $440 to $483, citing developments in Full Self-Driving (FSD) and the emergence of a Robotaxi network. The firm highlighted potential support from the Autonomous Vehicle Acceleration Act and progress at the Austin Robotaxi facility.
HSBC downgraded Intel to Reduce from Hold, pointing to a 55% share rally driven by one-off investments rather than sustainable operational improvements. Foundry issues and limited customer traction were cited, with a $24 price target assigned.
JPMorgan downgraded FedEx to Neutral due to ongoing margin pressures and structural freight business issues. The firm cited competitive threats and unresolved profitability challenges in Europe and the US.
UBS maintained Buy ratings on Schneider Electric, GEA Group, and Kone, with price targets of €280, €73, and €65, respectively. The bank cited growth tailwinds from data centres, dairy demand, and maintenance-driven revenue.
BofA upgraded Puma to Neutral from Underperform, raising its price target to €23. The firm highlighted stabilising liquidity and reduced financial risk, despite anticipated Q3 losses and declining 2025 sales. Focus is expected to remain on brand strength and retail optimisation.
Upcoming economic events and earnings
Investors will focus on several key events today:
- US initial jobless claims report
- Speech by Federal Reserve Chair Jerome Powell
- Earnings reports from:
- TSMC
- PepsiCo
- Delta Air Lines
- Levi Strauss & Co.
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