Global stock markets are reaching unprecedented highs, defying high oil prices and bond yields nearing multi-decade peaks. Gains in artificial intelligence and technology stocks have propelled the Nasdaq 100 to a record close, with advances in Nvidia and Microsoft pushing the S&P 500 to within 0.5% of its historical peak.
Bond Yields Climb as Inflation Concerns Resurface
In the U.S., the Dow Jones rose by 0.18%, and the S&P 500 increased by 0.66%. The tech-heavy Nasdaq surged by 1.05% to a record close. European and U.S. stock futures indicated continued upward momentum.
In Asia, the MSCI Asia-Pacific Index gained about 0.1%, remaining 2% below its record. The MSCI All-Country World Index stayed under 1.5% from its August peak. South Korea’s Kospi exceeded 7,030 in early trades on October 6th, with major companies like Samsung Electronics and LG Energy Solution posting gains, while SK Hynix and Samsung Biologics slipped.
Despite the buoyant mood in equities, U.S. bonds continued to face selling pressure. The 10-year Treasury yield rose by approximately one basis point to 5.32%, nearing levels last seen in 2002, while the 2-year yield increased by two basis points to 4.83%. Government bonds in Japan, Australia, and New Zealand mirrored the decline.
AI Demand Outstrips Supply, Industry Leaders Prepare for Future Expansion
The ISM data revealed that cost pressures in the service sector soared to their highest in over four years, rekindling inflation concerns. Nonetheless, Federal Reserve officials continue to downplay the likelihood of a near-term rate hike. Markets are pricing a roughly 25% probability of a rate increase at this month’s Federal Open Market Committee meeting.
Anticipation builds for the release of the Fed’s September meeting minutes on October 7. The Fed increased its policy interest rate last month for the first time in three years. High rates could diminish the allure of non-yielding bullion compared to treasury-backed securities.
Gold is trading at approximately $4,120 per ounce, after dropping 0.5% earlier. The dollar’s approach to its highest level of the year has further pressured gold, making it pricier for buyers using other currencies. Gold experienced a decline of over 6% last month due to energy-driven inflation concerns, potential further rate hikes, and the strengthening dollar. This downturn extended its loss to over 20% since mid-February amid U.S.-Iran tensions.
Silver remains steady at around $61.05, while platinum edges down and palladium rises. Brent crude recovers from Monday’s losses, rising 0.6% to approximately $100.90 per barrel.
Mirroring the growing borrowing costs, the euro hovered near a 17-month low due to concerns over France’s fiscal outlook. Investors are closely watching alternative budget proposals from Marine Le Pen and her party, aimed at reducing the fiscal deficit.
AMD CEO Lisa Su highlighted a supply-demand imbalance, citing burgeoning needs in AI. “We are working with memory suppliers to meet our customers’ needs and plan to significantly increase supply capacity by 2027,” Su stated. Market sources suggest a robust expansion in supply chain capacity, underscoring the industry’s vibrant outlook.
On the financial front, DeepSeek’s new funding round is expected to exceed its initial target of approximately 50 billion yuan. Market insights from Beating AI Insight Express indicate that this round could reach at least 80 billion yuan or about $12 billion, potentially nearing 100 billion yuan.
Tencent Holdings and CATL have committed to substantial investments, with the deal near completion. The increased funding, propelled by growing demand and investor interest following DeepSeek’s latest model, will be used to expand computational infrastructure, support research and development, and scale the team.
Meanwhile, a collaboration at Meta in the AI safety domain concluded earlier than expected. According to Semafor, Meta is laying off some employees from Virtue AI, hired in June, citing “mismatched work styles.” Meta Spokesman Andy Stone remarked, “The collaboration did not evolve as anticipated.”
Virtue AI founder and UC Berkeley computer science professor Dawn Song had announced joining Meta’s Superintelligence Labs with co-founders Bo Li, Sanmi Koyejo, and other team members. Rather than a full acquisition, this initiative represented an independent team integration into Meta. Virtue AI specializes in AI safety tests, attack simulations, threat detection, and governance.
Meta continues its focus on AI safety, alignment, and advanced risk challenges within Superintelligence Labs. The precise nature of any disagreements remains undisclosed, as does whether core team members, including Song, have completely exited. Virtue AI did not respond at the time of publication. This development reignites discussions on autonomy, decision-making processes, and cultural differences faced by research teams joining major tech firms.
Amid a search for new market directions, the calendar for October 6 includes a speech by Japan’s Central Bank Governor Kazuo Ueda, the U.S. Weekly ADP employment change, August trade balance, and the U.S. Energy Information Administration’s short-term energy outlook. In the crypto sphere, Cloud’s 25% supply burn, Ondo Finance, Pudgy Penguins’ Singapore meetings, and Ethereum’s Glamsterdam upgrade test net are of note.
