US stock futures rose on Monday as the federal government shutdown entered another week, while political drama in France and Japan gripped investors and an AMD (AMD)-OpenAI (OPAI.PVT) deal lifted hopes for the AI trade.
Dow Jones Industrial Average futures (YM=F) edged up 0.2%, while those on the S&P 500 (ES=F) gained 0.3%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the way higher, rising roughly 0.7% amid a near 25% premarket surge from AMD.
In another boost to the AI outlook, AMD (AMD) said Monday it has signed a multiyear deal with OpenAI (OPAI.PVT) to supply AI chips that will bring in tens of billions of dollars in annual revenue. It also gives the ChatGPT owner the option to purchase up to 10% of AMD, one of Nvidia’s (NVDA) key rivals.
That served as another AI-related boost to a market that has proved resilient despite the shutdown in Washington. Wall Street on Friday returned to a strong rally that has pushed major indexes to fresh record highs. Investors have focused on upbeat prospects for AI even as the stoppage delays key economic releases such as the monthly jobs report.
“There’s a certain amount of nihilism,” Steve Sosnick, chief strategist at Interactive Brokers, told Yahoo Finance. “All news is good news, and no news matters. By not getting this [jobs report], that’s one less impediment in the market’s relentless rise.”
But overseas, markets were rattled by political upheavals. In France, the CAC 40 (^FCHI) stock benchmark sank and the euro (EURUSD=X) fell after the sudden resignation of its prime minister pushed the country back into political crisis. And in Japan, the Nikkei 225 (^N225) surged almost 5% to a record high as an ultraconservative was all but confirmed as the country’s next leader in a surprise choice.
On Wall Street, data-starved investors could still get inputs for calculating the chances of two interest-rate cuts this year. On the Federal Reserve front, President Trump-backed Governor Stephen Miran is set to speak on Wednesday, followed by Chair Jerome Powell on Thursday. And data from non-government sources is also on deck, with the University of Michigan’s consumer sentiment report for October the likely highlight.
Meanwhile, third-quarter earnings are set to start trickling in, with results from PepsiCo (PEP), Delta Air Lines (DAL), and Levi Strauss (LEVI) on the docket this week.
LIVE 9 updates
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Good morning. Here’s what’s happening today.
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AMD soars after OpenAI looks to take stake through AI chip deal
AMD (AMD) stock rose 24% before the bell on Monday after announcing it will supply artificial intelligence chips to OpenAI (OPAI.PVT) in a deal set to bring in tens of billions of dollars in annual revenue and will give the ChatGPT creator the option to buy roughly 25% of the chipmaker.
Reuters reports:
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Goldman’s Kostin: S&P 500 firms to beat low earnings bar
Goldman Sachs Group (GS) strategist, David Kostin has said that US companies are set to enjoy a better-than-expected earnings season as a robust economy and a solid outlook for artificial intelligence have left estimates looking too low.
Bloomberg News reports:
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Tesla stock pops after EV maker teases Tuesday event
Shares in Tesla (TSLA) rose over 2% in premarket after the Elon Musk-led EV maker teased that a new product could be launched on Tuesday.
The hints came in posts to X on Sunday by Tesla, which reported record quarterly deliveries last week as US buyers rushed to snag an expiring tax credit.
But the automaker’s sales momentum has faltered this year, leading to hopes for a new, cheaper Tesla model to revive the market.
Reuters reports:
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Premarket trending tickers: Micron, OpenAI and UiPath
Here’s a look at some of the top stocks trending in premarket trading:
Micron (MU) stock rose 3% before the bell on Monday after Morgan Stanley upgraded the chipmaker from Equalweight to Overweight, raising its price target to $220.00 from $160.00.
OpenAI’s (OPAI.PVT) value has gone up 149% this year after the startup announced a flurry of deals and an instant buy option in ChatGPT, sending shares of Etsy (ETSY) and Shopify (SHOP) up.
UiPath (PATH) stock rose 10% in premarket trading on Monday. The company announced last month it had several new partnerships with Nvidia (NVDA), Alphabet (GOOG), Snowflake (SNOW), and OpenAI (OPAI.PVT).
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France’s stock benchmark sinks after PM’s sudden resignation
France’s stock benchmark the CAC 40 (^FCHI) slumped, down around 2% at one point on the heels of Prime Minister Sebastien Lecornu’s surprise resignation on Monday.
The euro (EURUSD=X) weakened against the dollar, while the 10-year yield on French government bonds jumped as the chances rose of fresh elections to resolve the political crisis.
Bloomberg reports:
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Japan stocks soar to record after surprise Takaichi win in race for next leader
Japanese shares surged to a record high on Monday, as Sanae Takaichi was all but confirmed to become the country’s next prime minister.
Meanwhile, the yen and long-term bond prices tumbled after Takaichi was chosen as leader of the LDP, Japan’s ruling party, as traders bet on a revival in big spending and loose monetary policy.
Reuters reports:
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Nvidia partner Hon Hai’s sales rise 11% in boost for AI outlook
Bloomberg reports:
Nvidia Corp.’s (NVDA) major server production partner Hon Hai Precision Industry Co. (HNHPF, 2317.TW) reported 11% growth in quarterly sales, signaling healthy demand for the chips and servers needed to develop artificial intelligence.
The Taiwanese company known also as Foxconn reported revenue of NT$2.06 trillion ($67.6 billion) for the three months to September, generally in line with analysts’ projections. It also projected a rise in sales this quarter from the previous three months, citing strong AI demand.
Hon Hai’s results may lend weight to bets on the sustainability of a post-ChatGPT boom in AI infrastructure construction that’s swept up big tech firms like Meta Platforms Inc. (META) and startups including OpenAI (OPAI.PVT). Globally, investors have poured capital into the suppliers of that rollout, from chipmakers and networking firms to companies like Hon Hai that make servers to house Nvidia chips. Still, some investors have warned that valuations are unsustainable until AI services truly go mainstream.
Read more here.
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Gold approaches $4,000 in record-setting run buoyed by government shutdown
Bloomberg reports:
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