US stock futures saw a positive uptick on Monday as the federal government shutdown dragged into its second week, drawing mixed reactions from investors amid political turmoil in France and Japan. The Dow Jones Industrial Average futures rose by 0.2%, while S&P 500 futures climbed 0.3%. Notably, contracts for the tech-heavy Nasdaq 100 outperformed, posting a nearly 0.7% increase, driven by a significant premarket surge of around 25% from Advanced Micro Devices (AMD).
AMD recently announced a major multiyear agreement with OpenAI to supply artificial intelligence (AI) chips, an arrangement poised to generate tens of billions in annual revenue. In addition to supplying chips, OpenAI has the option to acquire up to 10% of AMD, which positions it as a formidable competitor to Nvidia, a key player in the AI landscape.
This development has injected renewed vigor into the AI sector, contributing to a market environment that has shown resilience even in the face of ongoing political uncertainty in Washington. Recent rallying momentum on Wall Street has pushed major indices to record highs, with investors banking on optimistic AI growth prospects despite key economic indicators, including the monthly jobs report, being postponed due to the shutdown.
Steve Sosnick, chief strategist at Interactive Brokers, noted a prevailing sense of “nihilism” in the current market climate. “All news is good news, and no news matters,” he explained, emphasizing that the lack of the jobs report could serve as one less barrier to market growth.
Internationally, however, markets faced turbulence. In France, the CAC 40 index plummeted following the abrupt resignation of Prime Minister Sebastien Lecornu, which reignited concerns over the political stability of the nation. This led to a decline in the euro and spiked yields on French government bonds, raising the prospect of fresh elections.
Conversely, Japan’s Nikkei 225 surged close to 5% to reach an all-time high as Sanae Takaichi was confirmed as the front-runner for the next prime minister. Traders reacted positively to expectations of increased government spending and a continuation of loose monetary policies under her leadership.
Stateside, despite the lack of key economic data due to the shutdown, investors are anticipating insights that could inform expectations for potential interest rate cuts later this year. Federal Reserve officials, including Trump-backed Governor Stephen Miran and Chair Jerome Powell, are scheduled to speak this week, which could further shape market sentiment.
Additionally, the forthcoming third-quarter earnings reports from major corporations such as PepsiCo, Delta Air Lines, and Levi Strauss are also on investors’ radar.
In premarket trading, AMD’s stock exhibited impressive gains after confirming its deal with OpenAI. Tesla shares also rose by over 2% after hints of a new product announcement were made, likely aimed at revitalizing the company’s sales momentum amidst earlier setbacks.
Among other notable premarket movers, Micron’s stock advanced by 3% following an upgrade from Morgan Stanley, while OpenAI’s value surged by 149% this year due to various partnerships and innovations. UiPath also saw a 10% increase after announcing new collaborations with tech giants.
In contrast, the abrupt change in French leadership weighed heavily on the CAC 40, causing it to tumble by approximately 2%. Meanwhile, Japanese markets celebrated the anticipated economic shift under Takaichi, highlighting contrasting political landscapes affecting global equities.
In a related note, Hon Hai Precision Industry Co., Nvidia’s major server production partner, reported an 11% rise in quarterly sales, reflecting robust demand for AI-related infrastructure. This aligns with a broader trend where investors are increasingly channeling funds into companies supporting the development of AI technologies.
As global markets react to these varied narratives, gold prices are also approaching a record $4,000, buoyed by the uncertainties stemming from the government shutdown, adding another layer of complexity to the financial landscape.
