By Mike Dolan
What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
A combination of ongoing optimism over the AI boom, impressive U.S. bank earnings and an upturn in U.S. business surveys all boosted world stock markets despite U.S.-China trade tensions and the U.S. government shutdown.
After Dutch chip equipment giant ASML’s beat on Wednesday, Taiwan’s TSMC forecast fourth-quarter revenue up by as much as 24% on Thursday and said “the AI megatrend is strengthening”.
The updates follow a flurry of huge deals between AI firms and chipmakers in the past month, notably by OpenAI with Nvidia, Advanced Micro Devices and Broadcom to build $1 trillion or more in data center capacity. An investment consortium including BlackRock, Microsoft and Nvidia said on Wednesday it will buy one of the world’s biggest data center operators in a $40 billion deal.
The tech optimism comes after string of upbeat results from U.S. banks this week, with Morgan Stanley and Bank of America shares gaining more than 4% each on Wednesday and the S&P500 index advancing 0.4%. Stock futures were higher again ahead of today’s open, with European stocks rising too – led by a 9% surge in the world’s largest packaged food firm Nestle on its latest results and big job-cutting plan.
Even as Federal Reserve officials continue to sound dovish about further easing and estimates of the economic cost of the government shutdown emerge, the stock market optimism was underlined by an unexpected upturn in the New York Fed’s latest business survey for October. Treasury yields held steady and the dollar weakened, with more hawkish soundings from the Bank of Japan lifting the yen despite the political hiatus in Tokyo.
There was little sign of a breakthrough in the latest trade row between Washington and Beijing. French Prime Minister Sebastien Lecornu survived the first of two no-confidence votes in parliament, after winning crucial backing from the Socialist Party thanks to his pledge to suspend President Emmanuel Macron’s contested pension reform. French stocks and the euro were higher.
Gold continued to set new record highs.
* While President Trump declared the U.S. is “in a tradewar,” Treasury Secretary Scott Bessent signaled Washington doesnot seek escalation and left the door open to extend tariffreprieves, with a potential Trump–Xi meeting in South Korealater this month. Markets split the difference: AI optimismlifted semis and Asia tech, gold hit new highs, and the dollardrifted as rare earths and port‑fee salvos kept nerves taut. * A U.S. district judge in California halted theadministration’s plan to lay off thousands of federal workersduring the shutdown, after unions argued the move was unlawful.The ruling stems from reports that more than 4,100 notices hadalready gone out and that cuts could surpass 10,000, limitingimmediate drag from government payrolls but prolonging policyuncertainty. * Japan’s yen firmed and its government yield curveflattened even as Liberal Democratic Party leader Sanae Takaichilooked set to secure support to become the country’s next primeminister. Hawkish Bank of Japan board member Naoki Tamura saidinterest rates should rise and Japan’s finance ministerKatsunobu Kato told G7 counterparts that policymakers must bevigilant against excessive yen moves.
