Equities scale new highs ahead of a key week

Equity markets extended their gains on Monday, with the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all closing at record highs for a second consecutive session. The Nasdaq led the advance, rising 1.9% to 23,637.5, supported by strong performances in the communications and technology sectors, which climbed 2.3% and 2% respectively. Optimism over a potential US-China trade agreement ahead of President Trump’s meeting with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation conference helped fuel investor sentiment. Hopes that the two nations could reach a framework to ease trade tensions, along with expectations of further monetary policy support from the Federal Reserve, contributed to the upbeat market tone.

Among individual movers, technology stocks were at the forefront, buoyed by anticipation of key earnings reports from the so-called “Magnificent Seven” companies, including Alphabet, Meta, Microsoft, Apple, and Amazon. Qualcomm shares surged 11% after unveiling new AI chips and securing a major infrastructure deal with Saudi Arabia’s Humain, further boosting sentiment in the semiconductor space. Meanwhile, US Treasury yields were mixed, with the 10-year yield dipping to 3.99% ahead of the Fed’s policy meeting, where a 25-basis-point rate cut is widely expected. Overall, investor enthusiasm was underpinned by strong corporate earnings momentum, particularly within the technology sector, and growing confidence in a supportive policy environment.

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Asian markets mostly declined on Tuesday as investors weighed U.S. diplomatic developments and awaited key central bank decisions. Japan’s Nikkei retreated after hitting record highs, while South Korea’s KOSPI led regional losses. Sentiment remained supported by hopes for a U.S.-China trade deal, as attention turned to upcoming Fed and Bank of Japan policy announcements.

U.S. equity futures were flat as investors awaited Big Tech earnings, a likely 25-basis-point Fed rate cut, and progress in U.S.-China trade talks on rare earths, soybeans, and TikTok. Qualcomm rose on a new AI chip, while Amazon began historic layoffs, highlighting key corporate and policy developments shaping market sentiment this week.

European shares climbed to record highs for the third consecutive session, with the STOXX 600 up 0.2% as easing U.S.-China trade tensions lifted market sentiment. Banks and tech sectors rose 1%, while healthcare fell 0.5% following declines in Novartis and Roche. Italy’s index led gains with a 1% rise, while Porsche advanced 3%.

The dollar weakened on Tuesday ahead of key central bank meetings and President Trump’s Asia tour, with the euro rising to a one-week high of $1.1655 against the dollar. Sterling also gained, while the yen strengthened ahead of the Bank of Japan meeting. Markets are pricing in a 25-basis-point Fed rate cut amid the U.S. government shutdown.

Oil prices were little changed this morning, steadying after recent gains driven by U.S. sanctions on Russian energy firms and optimism over U.S.-China trade progress. Brent and WTI each dipped 0.1%, as reports that OPEC+ plans to raise output again in December tempered sentiment, with the group seeking to reclaim market share despite weak prices.

U.S. President Donald Trump ruled out running for vice president in 2028, calling the idea “too cute” and inappropriate. While the 22nd Amendment bars a third presidential term, some supporters had suggested the vice presidency as a workaround. Trump, who once promoted “Trump 2028” hats, said he’d love a third term but stopped short of fully ruling it out.

Treasury Secretary Scott Bessent confirmed five finalists to succeed Federal Reserve Chair Jerome Powell: board members Christopher Waller and Michelle Bowman, former Governor Kevin Warsh, White House economist Kevin Hassett, and BlackRock’s Rick Rieder. Interviews will continue, with Bessent presenting candidates to President Trump, who expects to announce a nominee before year-end.

U.S. President Donald Trump praised Japan’s new Prime Minister Sanae Takaichi during talks in Tokyo, where they signed agreements on trade and critical minerals. Takaichi pledged to boost defence spending and nominated Trump for the Nobel Peace Prize. The visit underscored closer U.S.-Japan ties ahead of Trump’s planned trade talks with China’s Xi Jinping in South Korea.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Qualcomm shares jumped over 10% after unveiling its AI200 and AI250 chips for data centre AI inference, challenging Nvidia. The energy-efficient, liquid-cooled chips feature high memory capacity. Qualcomm also partnered with HUMAIN to deploy 200 MW of AI racks in Saudi Arabia from 2026, marking its expansion beyond mobile into data centre AI.

Amazon plans to cut up to 30,000 corporate jobs, nearly 10% of its 350,000 corporate workforce, to reduce costs and address pandemic-era overhiring. Cuts may affect multiple divisions, including HR and devices. CEO Andy Jassy aims to streamline bureaucracy, with AI-driven automation likely to prompt further reductions. Notifications begin Tuesday.

HSBC this morning reported a 14% drop in third-quarter pretax profit to $7.3 billion, weighed down by $1.4 billion in legal provisions, including a Madoff-related claim. Excluding one-offs, pretax profit rose 3%, supported by wealth management and higher net interest income. Revenue increased 5% to $17.8 billion, with the bank reaffirming its 2025 return targets.

Tesla Chair Robyn Denholm warned shareholders that Elon Musk could step down as CEO if his proposed $1 trillion, performance-based pay package is not approved. Designed to retain Musk for seven-and-a-half years, the plan ties 12 stock-option tranches to ambitious targets, including market cap and autonomous technology milestones, amid scrutiny of board independence.

iPhone demand in China is recovering, with Jefferies noting accelerated growth and shorter lead times across models. iPhone 17 shipments rose 19% year-on-year in the first five weeks. However, aggressive pricing and shrinking resale premiums, especially for Pro models, raise concerns over profitability and potential margin pressure across the smartphone industry in 2026.

NextEra Energy and Google have agreed to restart Iowa’s Duane Arnold nuclear plant by early 2029, with Google committing to a 25-year power purchase. The move reflects rising AI-driven electricity demand and interest in carbon-free nuclear energy. NextEra will acquire full ownership, and both companies plan to explore next-generation nuclear technologies.

Nvidia and Deutsche Telekom plan to invest €1 billion in a new AI data centre in Germany, jointly funding the project to boost Europe’s AI infrastructure. SAP will be a key customer. The announcement, expected in Berlin next month, will feature leaders from Nvidia, Deutsche Telekom, SAP, and Germany’s digital ministry.

Meta Platforms launched "ghost posts" on its Threads platform, allowing posts to auto-archive after 24 hours. The feature lets users share thoughts privately, with replies sent to messaging inboxes and likes visible only to the poster. It complements recent updates like longer text attachments and spoiler-hiding. Shares rose 1.8% on the news.

Nelson Peltz’s hedge fund Trian and General Catalyst have made a $7.2 billion takeover offer for Janus Henderson, valuing shares at $46 each, sending shares up 14%. Already the largest shareholder with 20%, Trian aims to take the company private to invest more freely in technology and talent, while a special committee reviews the proposal.

UBS has applied for a national banking licence in the United States, aiming to strengthen its position as a leading global wealth manager. The application for a National Bank Charter for UBS Bank USA, expected to be approved in 2026, would make UBS the first Swiss bank to secure such a licence in the US.

Argentina’s assets surged after President Milei’s party won a decisive midterm victory. The peso strengthened 4%, local shares rose 22%, and international bonds rallied. The win boosts investor confidence, supporting faster economic reforms, potential foreign investment, and a stronger currency amid U.S.-backed initiatives.

JPMorgan analysts turned bullish on eurozone equities, citing a “goldilocks” scenario of resilient growth and cooling inflation. Lower bond yields, potential ECB rate cuts, and stronger fiscal spending could boost activity. Expected equity rotation favours exporters, large-cap regional firms, and bond proxies, with top picks including ASML, Air Liquide, AstraZeneca, Danone, Orange, Ryanair, and UBS.

Schneider Electric shares rose after Morgan Stanley upgraded the equity to overweight, citing improving margins, productivity, and software performance. The bank raised its price target to €280, forecasting 8% organic revenue growth, 17% EPS growth by 2027, and higher dividends. Data-centre operations and AI partnerships support long-term profitability, making the shares an attractive entry point.

Truist upgraded Booking Holdings to Buy from Hold, citing long-term growth in Asian travel, steady global GDP expansion, and an improved valuation backdrop, raising its price target to $5,750. Analyst Gregory Miller highlighted Asia’s rising travel share and 7–9% air traffic CAGRs, while maintaining a Hold on Expedia despite a higher $210 price target.

Jefferies upgraded AstraZeneca to Buy from Hold, citing strong growth in oncology, biopharma, and rare disease segments. The brokerage raised its price target to 15,000p, highlighting Imfinzi and Enhertu’s sales potential and a credible $80 billion 2030 revenue target. EPS is projected to grow 13% CAGR to 2030, supported by robust product pipelines and global opportunities.

Upcoming data and events

The main economic focus in the US today will be on new home sales and the consumer confidence index. Earnings reports are due from Visa, UnitedHealth, NextEra Energy, PayPal, and American Tower.