At the close on Thursday, the Dow Jones (US30) rose by 0.17%. The S&P 500 (US500) gained 0.06%. The technology-heavy Nasdaq (US100) closed 0.39% higher. Major US stock indices closed at new records on Thursday. The rally was led by technology companies, spurred by gains in AI-related stocks like Nvidia (+1% ), Broadcom (+1.5% ) and AMD (+3.5% ), as well as a $6.6 billion share sale by OpenAI, which valued the company at $500 billion and highlighted its deal with South Korean chipmakers. Meanwhile, shares of Microsoft dropped 1.6% and Tesla fell by 1.8%, reversing earlier gains, despite the latter reporting a 7.4% year-over-year increase in global vehicle deliveries in the third quarter, which was boosted by the expiration of the EV tax credit at the end of September. Investors also monitored developments in Washington, where President Trump threatened to cut thousands of federal jobs to pressure Democrats during the second day of the government shutdown.
The Canadian dollar (CAD) weakened to 1.394 per USD, its lowest level since May, as softer domestic data fueled expectations of further policy easing by the Bank of Canada (BoC) and oil prices retreated. Following the BoC’s rate cut to 2.50% on September 17, a summary of deliberations indicated a willingness for additional cuts if downside risks persist, pushing markets to anticipate further easing and reducing demand for the yield-sensitive CAD. The S&P Global Manufacturing PMI for Canada fell to 47.7 in September, the eighth straight monthly contraction, underscoring a decline in new orders and production and strengthening the case for rate cuts. Lower oil prices, amid prospects of increased OPEC+ output and reduced demand in the US and Asia, removed crucial trade terms support for the currency, adding to the pressure.
Bitcoin surged to the $120,000 mark in early October, hitting a seven-week high, as political uncertainty and expectations of further US interest rate cuts supported demand. The US government entered its first shutdown in almost seven years after lawmakers failed to agree on temporary funding. The closure is expected to last at least three days and will delay the release of the September Non-Farm Payrolls report. Bitcoin also benefited from risk-on sentiment in stock markets, fueled by the OpenAI deal with South Korean chipmakers Samsung Electronics and SK Hynix, which boosted AI optimism.
European equity markets rose strongly on Thursday. The German DAX (DE40) climbed 1.28%, the French CAC 40 (FR40) closed 1.13% higher, the Spanish IBEX35 (ES35) fell 0.27%, and the UK FTSE 100 (UK100) closed negative 0.20%. The Frankfurt-based DAX Index rose by approximately 1.3%, reaching its highest level since July 10 and extending its rally for a fifth consecutive day. Global optimism about artificial intelligence helped mitigate concerns over the ongoing second day of the US government shutdown. On the corporate front, Siemens led the gains, rising 4.2% on reports that the German conglomerate is considering spinning off a significant part of its stake in Siemens Healthineers. This was followed by Siemens Energy shares, which rose 4.1% after Berenberg raised its price target to €122.00 from €75.00, maintaining a “buy” rating.
WTI crude oil prices dropped more than 2% on Thursday to 60.5 per barrel, their lowest in four months and marking a fourth straight decline amid supply concerns. OPEC+ is expected to approve a November production increase of up to 500,000 barrels per day, triple the October increase, with Saudi Arabia pushing to restore market share. Additionally, US crude and gasoline inventories are rising, and Iraqi Kurdish oil exports via Turkey’s Ceyhan terminal are set to resume following a deal to restart flows.
The US natural gas prices rose by 2% on Thursday to 3.54 per MMBtu, extending gains for a fifth straight session and reaching an 11-week high following a bullish EIA inventory report. Inventories rose by only 53 billion cubic feet (Bcf) for the week ending September 26, significantly below expectations of 67 Bcf and the five-year average of 85 Bcf. Total working gas in storage now stands at 3.561 trillion cubic feet, 0.6% above last year’s level and 5% above the five-year norm.
Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.87%, China’s FTSE China A50 (CHA50) did not trade due to holidays, Hong Kong’s Hang Seng (HK50) rose 1.61%, and the Australian ASX 200 (AU200) showed a positive result of 1.13%..
Japan’s ruling Liberal Democratic Party (LDP) will elect a new president on Saturday, who is typically set to become Prime Minister. Five contenders are vying to replace Shigeru Ishiba, who is stepping down following electoral setbacks. The race is led by Sanae Takaichi and Shinjiro Koizumi, whose platforms differ sharply. Takaichi, a conservative nationalist linked to the late Shinzo Abe, promises bold fiscal stimulus measures to “shake up the economy” and may push for a review of the US-Japan trade agreement. Koizumi supports tax cuts for households while maintaining Ishiba’s cautious economic stance. Takaichi plans to double Japan’s economy within ten years through massive public investment in technology and infrastructure.
