S&P 500 hits record as AI optimism lifts tech

US stocks posted a mixed but generally upbeat performance on Monday, as optimism around artificial intelligence and expectations of future rate cuts lifted sentiment. The S&P 500 rose 0.40% to another record close, while the Nasdaq Composite gained 0.70% on strength in tech and AI-linked shares. The Dow Jones Industrial Average slipped 0.10%, reflecting uneven sector performance. AMD jumped nearly 24% after unveiling a major partnership with OpenAI, sparking a rally across semiconductor and data infrastructure stocks. Despite uncertainty from a partial government shutdown, investors remained confident, interpreting it as a sign that the Federal Reserve (Fed) could adopt a more accommodative stance. Treasury yields ticked slightly higher, with the 10-year yield closing around 4.16%, up from roughly 4.12% a day earlier.

European stocks fell into negative territory as renewed political unrest in France reignited concerns over fiscal stability across the Eurozone’s largest economies. The Euro STOXX 50 slipped 0.30% to 5 633 points, while the STOXX 600 finished flat at 571. Markets reacted to the sudden resignation of Prime Minister Sébastien Lecornu, who stepped down just weeks after taking office amid parliamentary resistance to spending cuts, deepening fears of budget gridlock. French financials led losses as weaker OATs weighed on balance sheets—BNP Paribas fell 3.50% and AXA dropped 2.50%—while luxury and industrial heavyweights such as LVMH, Hermès, and EssilorLuxottica each declined over 2%. Tech stocks, however, bucked the trend, with ASML and Adyen gaining about 2% each, supported by optimism over the new OpenAI–AMD partnership.

The offshore yuan held near 7.14 per dollar in subdued trade during China’s Golden Week holiday, reflecting limited market activity but retaining a soft bias against a stronger US dollar. The greenback firmed as investors weighed the implications of the ongoing US government shutdown following lawmakers’ failure to pass a funding bill. In trade developments, China appeared to gain leverage in US–China negotiations, highlighted by the absence of new Chinese soybean orders despite the start of the northern hemisphere harvest. The move underscored Beijing’s growing confidence, bolstered by its firm control over rare earth exports. Investors now look ahead to potential progress during the Trump–Xi meeting on the sidelines of the APEC summit in South Korea from 31 October to 1 November.

South African equities edged higher, with the FTSE/JSE All Share Index up 0.13% and the Top 40 rising 0.12%, led by the Property Index, which climbed 0.92% as investors sought stable, income-generating assets amid global uncertainty. Financials traded mixed, with banks and insurers under pressure from rising bond yields and cautious investor sentiment, while commodity-linked stocks remained subdued due to softer industrial demand from key trading partners such as China. The rand weakened slightly to around R17.22/$, reflecting broader risk-off conditions, and long-dated government bond yields ticked higher, with the 10-year yield at 9.23%, signalling modest pressure on sovereign debt. Overall, the session reflected a cautious but selective market, driven by defensive positioning in property and yield-sensitive sectors, while investors awaited domestic economic data—including gold reserves and manufacturing output—for guidance on the economic outlook.

Commodities traded with a mixed but cautiously optimistic tone on Monday, as investors weighed global uncertainty against supply dynamics. Gold surged to an all-time high of $3 944.63 per ounce, with spot prices closing around $3 925.91, supported by safe-haven demand amid the ongoing US government shutdown and expectations of future Fed rate cuts. Oil saw modest gains, with Brent crude rising 0.90% to $65.11 per barrel and WTI up 0.80% to $61.34, following OPEC+’s announcement of a measured production increase for November. The cautious approach by the oil cartel, after months of elevated output, helped underpin prices amid concerns about oversupply and slowing global demand, particularly from China. Overall, commodity markets reflected a delicate balance between safe-haven flows, geopolitical developments, and ongoing supply considerations.