5 Trillion Dollar Companies and 5% Interest Rates | The Current State of the Global Economy Exceeds the Japanese Perception

From the end of October through November, major U.S. companies will be announcing their financial results one after another.

NVIDIA, Apple, Microsoft, Google, and Amazon. While these are all companies familiar to Japanese people, surprisingly few people may truly grasp just how massive their current corporate scale has become.

Meanwhile, in global financial markets, government bond yields in the U.S. and Europe have reached around 5%. The ongoing wars in the Middle East and Ukraine are also impacting the global economy through energy prices.

Stock prices are high. Yet, interest rates and prices are also high.

This time, rather than analyzing the performance of individual companies, I would like to look at the global economy as of October 2026 through a few key figures.

The world’s largest company is now on the scale of 5 trillion dollars

First, let’s look at the market capitalization of companies around the world.

Market capitalization is the amount calculated by multiplying the stock price by the number of shares outstanding. Simply put, it is the price the stock market has placed on the entire company.

As of October 23, 2026, the market capitalization of major giant companies is as follows.

Incidentally, Japan’s nominal GDP is approximately 4.38 trillion dollars (2026, IMF estimate).

In other words, the market capitalizations of NVIDIA and Apple each exceed Japan’s annual GDP.

Converted at 157 yen to the dollar, NVIDIA’s market capitalization is approximately 799 trillion yen. Apple’s is also approximately 796 trillion yen.

GDP is the total value added produced domestically in one year, while market capitalization is the market value of a company that also incorporates expectations for the future. GDP and market capitalization are inherently different figures. It is a stretch to compare the two and think that ‘NVIDIA is larger than the Japanese economy.’

Even so, aren’t these impressive figures for understanding the scale of the current global economy?

The scale is different from Japanese companies of the past

In the late 1980s, Japan was one of the world’s leading economic powers, and the bubble was at its peak.

In the 1989 world market capitalization ranking, NTT was in first place. The Industrial Bank of Japan, Sumitomo Bank, and Fuji Bank were also ranked high, and Japanese companies occupied the majority of the world’s top 10 companies.

About 40 years have passed since then.

The current top companies are centered around giant U.S. tech firms.

The strengths of Japanese companies in the past lay in finance, automobiles, electronics, and manufacturing. On the other hand, today’s giant corporations focus their businesses on semiconductors, software, cloud computing, digital advertising, and online retail.

Moreover, many of these are deeply involved in the current AI development race.

There are massive revenue bases that were built long before AI gained attention, such as Apple’s iPhone, Microsoft’s enterprise software, Google’s search advertising, and Amazon’s e-commerce business.

Added to this is the new growth expectation of AI, which is further boosting corporate value.

Also, when Japanese people view dollar-denominated corporate scale converted into yen, the recent depreciation of the yen makes the figures look larger. However, even excluding the yen’s depreciation, it is certain that global giant corporations have grown to a scale incomparable to the past.

Rankings may change further with the IPOs of AI companies

And there are giant companies not yet included in these rankings.

They are OpenAI, which develops ChatGPT, and Anthropic, which develops Claude.

Both companies play a central role in the generative AI development race, but as of October 2026, neither is listed on the stock market.

Anthropic is reported to be aiming for an IPO (Initial Public Offering) in November, and its corporate value could reach the $1.5 trillion to $2 trillion range.

Meanwhile, it is also reported that a corporate valuation exceeding $1.4 trillion is being discussed for OpenAI in its new fundraising.

The actual valuation will vary significantly depending on IPO conditions and market environment. The valuation of a private company during fundraising and the market capitalization of a public company are not determined under the same conditions.

Even so, the fact that generative AI companies are being valued at a scale that rivals the world’s giant corporations is worth noting.

Meanwhile, energy prices continue to soar globally

However, the global economy is not entirely about the AI boom.
Rather, the environment surrounding financial markets is becoming increasingly severe.

One of the major factors for this is the ongoing wars in the Middle East and Ukraine.

According to the U.S. Energy Information Administration (EIA), the average price of Brent crude oil in September 2026 was $114 per barrel, an increase of $23 from August.

In the Middle East, attacks on oil-related facilities and tankers continue, affecting the production and transportation of crude oil.

Also, the prolonged Russian invasion of Ukraine is affecting the energy market. Attacks on oil refineries within Russia and other factors are causing disruptions in the supply of petroleum products.

In its October report, the International Energy Agency (IEA) pointed out that reduced supply from the Middle East and Russia is tightening the international market for products like diesel fuel.

Energy prices are not determined solely by war, but it is a simple logic that the longer geopolitical tensions persist, the greater the risk that supply will become unstable and prices will remain high.

This is a serious problem, especially for Japan and Europe, which depend on imports for energy resources. In Japan’s case, the structure is such that the impact is even greater because the weak yen pushes up import prices.

Raising interest rates will not increase crude oil production

Here, there is another important issue.

Usually, central banks raise policy interest rates to curb inflation.

When borrowing costs rise, companies refrain from capital investment, and households also curb consumption. The idea is to suppress price increases by weakening demand across the entire economy.

However, the rise in energy prices due to war is not caused solely by demand being too strong. Prices are rising because the supply of crude oil and natural gas is being constrained.

Even if a central bank raises interest rates, it will not repair destroyed oil facilities.

Inflation caused by such supply-side factors has the characteristic of being difficult to resolve through monetary policy alone.

Of course, interest rate hikes are not meaningless. They play a role in preventing inflation from becoming prolonged by spreading the rise in energy prices to wages and service prices.

However, if interest rates are raised too much, it will end up worsening the economy.
For central banks, this is a difficult decision.

In fact, in the World Economic Outlook published by the IMF in October, the global inflation rate for 2026 is projected to be 4.7%.

The recognition is that while AI-related investment is boosting the economy, the rise in energy prices associated with war is placing a burden on prices and economic activity.

Global government bond yields are approaching 5%

In this situation, there is another figure I would like to draw attention to.

As of October 23, 2026, the 10-year government bond yields of notable countries are at the following levels.

Government bonds are like IOUs issued by the government.
In the government bond market, when the price of a government bond falls, the yield rises.

The 10-year government bond yield, or long-term interest rate, reflects various factors such as future inflation expectations, policy interest rate outlooks, and the government’s fiscal condition. Therefore, please be aware that it is inappropriate to explain the current high interest rates solely by the rise in energy prices.

I am particularly concerned about France.

The yield on France’s 10-year government bond has risen to around 5%, which is almost the same as that of the United States.

In Europe, while monetary policy is handled by the European Central Bank (ECB), government bonds are issued by each individual country’s government. Even though they use the same euro, the fiscal conditions and creditworthiness of each country are not the same. This is a structural problem that has been pointed out since the inception of the eurozone.

It is not a foregone conclusion that France’s fiscal problems will immediately lead to a debt crisis for Europe as a whole. However, if the government’s borrowing costs rise, fiscal management becomes difficult. And the essence of the problem is that more than half of France’s GDP has become government spending, and GDP growth cannot keep up even when faced with long-term interest rates near 5%.

Stock prices are high. Yet interest rates are also high.

In the current financial market, this combination is particularly concerning.

In the past, in a global low-interest-rate environment, the term TINA was used. There Is No Alternative, which means there is nowhere else to invest.

If you buy government bonds, you cannot get a sufficient yield. Bank deposits also do not earn interest. The idea is that you have no choice but to invest in stocks.

However, current U.S. Treasury bonds have a yield of about 5% for the 10-year note.

Although there are risks such as interest rate fluctuations and exchange rate fluctuations with U.S. Treasury bonds, it is not a situation like before where you have no choice but to buy stocks because you cannot get a yield from bonds.

Nevertheless, the stock prices of major U.S. tech companies remain at a high level.

According to textbooks, rising interest rates are a headwind for stock valuations. This is because the present value of future earnings decreases and the cost of corporate financing also rises.

The fact that stock prices are still high suggests that investors have high expectations for future profit growth.

Expectations for AI, in particular, are likely an important factor. Herein lies the difficulty of the current global economy.

On one hand, huge capital investment continues due to expectations for the new technological innovation called AI.

On the other hand, rising energy prices due to the prolonged war are a factor in prolonging inflation.

If inflation continues, central banks cannot easily lower interest rates. High interest rates affect the profitability of capital investment and the valuation of stocks.

In other words, while growth expectations for AI are pushing up corporate value, the financing environment to realize that growth remains severe.

However, one cannot immediately conclude from this that it is an AI bubble that will burst.

How much economic value will AI actually generate? To what extent will that be reflected in corporate profits?

At this point, there are still parts that cannot be fully foreseen. The fact that technological innovation is real and that a company’s stock price is appropriate are separate issues.

Future economic news will require a slightly different perspective.

The US midterm elections are scheduled for November 3rd.

Around this time, a series of events that the market is paying attention to will follow, such as earnings reports from major tech companies, fundraising by AI-related firms, and Anthropic’s IPO plans.

At the same time, the situation in the Middle East and Ukraine, energy prices, and fiscal issues in Europe continue to impact financial markets.

Let’s list the figures we have looked at so far once more.

• The market capitalization of the world’s largest company is approximately 5 trillion dollars.

• The 10-year government bond yields in the US and France are approximately 5%.

• The average price of Brent crude oil in September was 114 dollars per barrel.

• The global inflation rate for 2026 projected by the IMF is 4.7%.

All of these are figures that differ from our economic sense until recently.

And these do not exist independently of one another.

The AI boom is boosting corporate growth expectations and capital investment, while geopolitical risks are affecting energy supply and prices. Trends in inflation and interest rates are also involved in corporate fundraising and stock market valuations.

To understand the movements of the global economy, looking at just the stock market or just the bond market is insufficient.

Admittedly, if you delve into the financial analysis of individual companies or the theory of interest rates, the discussion becomes quite difficult.

First, let’s consider how large the numbers are that drive the current global economy. And what kind of forces are at work behind those numbers.

When reading upcoming earnings announcements and economic news, I would like to look not only at the performance of individual companies but also at the changes in the global economy that lie behind them.

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