Hewlett Packard shares +35%
 

Trading Day

Trading Day

A Reuters Open Interest newsletter

Making sense of the forces driving global markets

 

By Jamie McGeever, Markets Columnist 
 

Conflicting headlines on the US-Iran ceasefire dominated world markets on Monday, with the big three U.S. stock indices eventually joining several key global benchmarks in an AI-driven rally to new highs after President Donald Trump said the two sides were still talking.

In my column today, I look at the so-called 'K-shaped' U.S. economy. The personal saving rate has slumped to a historic low, while corporate America and the asset-owning rich are enjoying the fruits of the AI capex boom. Something has to give, right?

I’d love to hear from you, so please reach out to me with comments at jamie.mcgeever@thomsonreuters.com. You can also follow me at @ReutersJamie and @reutersjamie.bsky.social. 

 

Data refreshes every time you open this email. For more U.S. market news, click here. Please send any feedback to morningbid@thomsonreuters.com.

 

Today's Key Market Moves

  • STOCKS: MSCI World, MSCI Asia ex-Japan, MSCI EM index, Wall Street's big 3 indexes, Japan's Nikkei all hit new highs. South Korea +4%. Europe, UK fall.
  • SECTORS/SHARES: Only two of the S&P 500's 11 sectors rise - tech +2.5%, energy +1.9%. The rest fall, utilities leading the way -3%. Dell, Oracle both +10%, Nvidia +6%, Micron tops $1,000. Hewlett Packard +35% in after hours trade after results. Qualcomm -9%, Meta and Intel -5%.
  • FX: Dollar up broadly, USD/JPY up towards 160.00. NZD, SEK -1%, biggest G10 movers; ARS -1.5%, biggest EM decliner. Bitcoin -3% to lowest since mid-April.
  • BONDS: Treasury yields up as much as 3 bps.
  • COMMODITIES/METALS: Oil spikes: Brent +5%, WTI +6%. US natgas -3%. Gold-1%.
 

Today's key reads

  1. Ceasefire very likely to end if Israeli attacks on Lebanon persist, Iranian TV says
  2. AI giant Anthropic confidentially files for US IPO as investors bet big on AI future
  3. Nvidia launches new chip to bring AI directly to personal computers
  4. Factories face soaring costs as Iran war causes supply shocks
  5. INSIGHT-A bachelor's in rare earths? In China, there are schools for that
 

Today's Talking Points

* IPO mAnIa

Wall Street's AI frenzy went up a notch on Monday. Nvidia unveiled a new chip that puts AI capabilities directly into laptops and desktops, and Anthropic said it has confidentially filed for a U.S. market listing. OpenAI is preparing a similar filing, and SpaceX is set to price its IPO later this month.

That's potentially up to $4 trillion of market cap valuation at IPO in the coming weeks. Even though the value of shares floated will be much lower, the questions still remain - will the market be able to absorb these new issues, and is this a sign that the market is at or near a frothy top? 

 

* Everybody's talking about ISM

Figures on Monday showed that U.S. manufacturing activity is growing at its fastest pace in four years, driven by AI capex. This may be something of a surprise to the casual observer (not the AI capex bit) - aren't tariffs, inflation, and record low consumer confidence meant to be a dead weight on the economy? 

Maybe firms are front-loading orders ahead of a downturn, and executives do say war, tariffs and price pressures are major concerns. Still, factories are doing brisk business, to the surprise of many economists, if the U.S. economics surprises index is any guide. 

 

* Leadership

Monday's session on Wall Street was remarkable. The big three indexes - S&P 500, Nasdaq and Dow - all hit new highs. Yet only two of the 11 sectors on the S&P 500, the broadest measure of the market, actually rose: tech +2.4% and energy +2%. The other nine sectors all fell, some significantly - utilities slumped 3% and consumer discretionaries fell 2.6%.

Narrow leadership in U.S. stocks is nothing new, but this is pretty remarkable, especially considering some big tech names like Meta, Intel and Qualcomm fell between 5% and 9%. Don't rule out another tech-led rise on Tuesday, after Hewlett Packard shares soared 35% after the bell on Monday. 

 

US consumers' savings buffer is gone. Now what?

As corporate America continues to ride the AI boom, huge swathes of the U.S. population are struggling to keep up, with savings levels plunging. This widening chasm could have serious political ramifications for President Donald Trump.