December Nasdaq 100 E-Mini futures (NQZ25) are trending up +0.31% this morning as another round of major AI deals and partnerships boosted sentiment.
Japan’s Hitachi formed a partnership with OpenAI on energy and related infrastructure. Also, Fujitsu expanded its collaboration with Nvidia. In addition, Bloomberg reported that Global Infrastructure Partners was in advanced talks to acquire Aligned Data Centers, targeting a major beneficiary of the AI spending boom. Investors are welcoming a wave of AI alliances, betting that the billions flowing into the sector will turn into profits.
Optimism surrounding AI is outweighing concerns about the U.S. government shutdown, which has entered its third day. U.S. Treasury Secretary Scott Bessent cautioned on Thursday that the shutdown could be “a hit to growth.”
In yesterday’s trading session, Wall Street’s major indices ended in the green, with the S&P 500 and Nasdaq 100 notching new record highs. Fair Isaac (FICO) jumped over +17% and was the top percentage gainer on the S&P 500 after introducing new pricing models that will enable credit report providers to directly access FICO scores. Also, chip stocks advanced on AI optimism after South Korea’s Samsung Electronics and SK Hynix partnered with OpenAI, with Intel (INTC) and Advanced Micro Devices (AMD) rising more than +3%. In addition, Celanese (CE) climbed about +7% after Citi upgraded the stock to Buy from Neutral with a price target of $53. On the bearish side, Occidental Petroleum (OXY) slid more than -7% and was among the top percentage losers on the S&P 500 after agreeing to sell its chemical division, OxyChem, for $9.7 billion to Berkshire Hathaway.
Data from the outplacement firm Challenger, Gray & Christmas released on Thursday showed that companies announced plans to add 117,313 jobs last month, down 71% from a year earlier and marking the weakest September for hiring intentions since 2011. Separate data from Revelio Labs showed that employment rose by about 60,000 in September, marking an improvement from the previous month.
Chicago Fed President Austan Goolsbee said on Thursday that new data from his staff indicates the labor market remains stable. “I think it indicates some steadiness in the labor market, and I think the underlying economy is still growing pretty solidly,” Goolsbee said. He reiterated that rates could be lowered “a fair amount” if policymakers gain confidence that inflation is moving back toward the Fed’s 2% target. Also, Dallas Fed President Lorie Logan said she will approach further rate cuts with caution as inflation risks continue to outweigh the threat of higher unemployment. “My forecast has a little bit slower of a normalization of the policy path in order to make sure we get all the way to 2%. So it will take some time,” Logan said.
Meanwhile, U.S. rate futures have priced in a 97.8% chance of a 25 basis point rate cut at October’s monetary policy meeting.
On the trade front, Treasury Secretary Scott Bessent predicted a “pretty big breakthrough” in the next round of trade talks with China.
In light of the government shutdown, the publication of September’s nonfarm payrolls report, average hourly earnings, and unemployment rate, originally set for today, will likely be delayed.
Still, the U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI will be released today. Economists expect the September ISM services index to be 51.8 and the S&P Global services PMI to be 53.9, compared to the previous values of 52.0 and 54.5, respectively.
In addition, market participants will parse comments today from New York Fed President John Williams, Chicago Fed President Austan Goolsbee, Dallas Fed President Lorie Logan, Fed Vice Chair Philip Jefferson, and Fed Governor Stephen Miran.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.092%, up +0.10%.
The Euro Stoxx 50 Index is up +0.20% this morning, extending its record run. Mining stocks led the gains on Friday. Also, bank stocks climbed, with Raiffeisen Bank International AG (RBI.V.DX) surging over +6% after the Financial Times reported that the European Union was considering lifting sanctions on assets tied to Russian oligarch Oleg Deripaska to compensate the bank. Limiting gains, technology stocks retreated due to profit-taking. The benchmark index is on track to notch a strong weekly gain. A survey released on Friday showed that growth in the Eurozone services sector picked up slightly in September to an 8-month high, though the expansion remained modest as hiring stalled amid only a limited improvement in demand. Separately, data showed that France’s monthly industrial production unexpectedly fell in August, adding to pressures on the broader European industry. Meanwhile, French Prime Minister Sebastien Lecornu pledged to resolve the political deadlock and secure parliamentary approval for a budget by the end of the year. Investors also remain focused on developments surrounding the U.S. government shutdown. In other corporate news, ABN Amro Bank N.V. (ABN.NA) rose more than +2% after Goldman Sachs upgraded the stock to Buy from Sell.
France’s Industrial Production, Eurozone’s Composite PMI, Eurozone’s Services PMI, and Eurozone’s PPI data were released today.
The French August Industrial Production unexpectedly fell -0.7% m/m, weaker than expectations of +0.3% m/m.
Eurozone’s September Composite PMI came in at 51.2, in line with expectations.
Eurozone’s September Services PMI stood at 51.3, weaker than expectations of 51.4.
Eurozone’s August PPI fell -0.3% m/m and -0.6% y/y, weaker than expectations of -0.1% m/m and -0.4% y/y.
Japan’s Nikkei 225 Stock Index (NIK) closed up +1.85%, while mainland China’s financial markets were closed for a holiday.
Japan’s Nikkei 225 Stock Index closed sharply higher and hit a new record high today as enthusiasm over AI boosted sentiment. Technology stocks rallied on Friday, led by a more than +10% jump in Hitachi after the company formed a partnership with OpenAI on energy and related infrastructure. Japanese equities were also underpinned by a weaker yen. The yen weakened against the dollar after Bank of Japan Governor Kazuo Ueda kept policy options open by reaffirming the bank’s long-standing stance on interest rates. Ueda said the bank will hike rates if economic and price developments move in line with its projections. Still, he refrained from giving any clear indications about the likelihood of a rate hike at the BOJ’s meeting later this month. Meanwhile, the benchmark index posted gains for the week. On the economic front, a private survey released on Friday showed that Japan’s services sector activity posted solid gains in September, supported by strong domestic demand and standing in sharp contrast to the contraction in factory activity. Separately, data showed that Japan’s unemployment rate rose to a 13-month high in August. In other corporate news, Fujitsu rose over +3% after the company expanded its collaboration with Nvidia. Investors now await the ruling Liberal Democratic Party’s leadership vote on Saturday, which is expected to determine the country’s next prime minister. Frontrunner Shinjiro Koizumi is regarded as a continuity candidate, while rival Sanae Takaichi is considered a fiscal and monetary dove. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -1.78% to 24.84.
The Japanese September au Jibun Bank Services PMI stood at 53.3, stronger than expectations of 53.0.
The Japanese August Unemployment Rate was 2.6%, weaker than expectations of 2.4%.
China’s Shanghai Composite Index was closed today for the National Day holiday. Mainland China’s financial markets will reopen on Thursday, October 9th.
Pre-Market U.S. Stock Movers
Chip stocks are moving higher in pre-market trading amid continued AI optimism, with ON Semiconductor (ON) and Advanced Micro Devices (AMD) up about +1%.
Rumble (RUM) surged more than +10% in pre-market trading after announcing a partnership with Perplexity to integrate the company’s AI tools to improve video discovery on its platform.
USA Rare Earth (USAR) climbed over +8% in pre-market trading after CEO Barbara Humpton told CNBC that the company was “in close communication” with the White House.
Johnson & Johnson (JNJ) rose about +1% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $212.
Applied Materials (AMAT) fell over -3% in pre-market trading after the chip equipment maker cautioned that new U.S. export rules would further hit its revenue.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - October 3rd
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