Tech drives sustained gains on Wall Street

General market commentary

US equity markets advanced on Monday, led by strong gains in the technology sector. Nvidia shares rose nearly 4% after announcing plans to invest up to $100 billion in OpenAI, boosting confidence in the AI growth story and driving the Nasdaq Composite 0.70% higher to a fresh record of 22,788.9. The broader S&P 500 also gained 0.44% to 6,693.7, while the Dow Jones Industrial Average edged up 0.14% to 46,381.5. Small caps joined the move higher, and Apple added further momentum with a 4.3% rally after analysts at Wedbush struck an upbeat tone on future iPhone demand. Oracle was another standout, with its equities rising more than 6% after confirmation that it would provide security oversight for a US version of TikTok’s algorithm.

The supportive tone for equities was underpinned by ongoing enthusiasm for growth shares, even as bond yields drifted upwards. Gold continued its strong run, climbing more than 2% to new highs above $3,780 per ounce, reflecting investor demand for safe-haven assets amid expectations of a dovish Federal Reserve. Fed officials offered mixed signals on monetary policy, with Governor Stephen Miran suggesting rates remain “very restrictive” and could be lowered more quickly, St. Louis Fed President Alberto Musalem noting limited room for further cuts, and Atlanta Fed President Raphael Bostic cautioning against easing again this year due to persistent inflation. Economic data added to the mixed picture, with the Chicago Fed National Activity Index showing modest improvement. The communication sector remained the weakest performer on the day, but overall Monday’s session underscored the dominance of the technology theme in driving US equity markets to fresh highs despite a backdrop of tighter financial conditions.

Latest market and economic update

Most Asian equities remained rangebound this morning, with Chinese and Hong Kong tech shares retreating after recent rallies. South Korea’s KOSPI rose 0.3% and Australia’s ASX 200 gained 0.5%, aided by miners, while Singapore’s index remained flat. Caution stemmed from mixed US rate signals, Trump’s H-1B crackdown, and subdued regional volumes amid a Japanese holiday.

US equities futures were mostly flat overnight, reflecting cautious investor sentiment ahead of key economic data. Futures for major indexes showed little movement despite recent tech-driven gains, with traders awaiting the release of Friday’s PCE inflation report for guidance on the Federal Reserve’s monetary policy outlook.

European equities closed slightly lower on Monday as investors weighed global rate outlooks and geopolitical risks. The STOXX 50 fell 0.3% to 5,445 and the STOXX 600 eased 0.1% to 554. Auto shares led losses, with Porsche down 7.2%, Volkswagen 7.1%, and Stellantis over 2%.

The U.S. dollar traded lower this morning, extending declines after snapping a three-day winning streak, with the dollar index at 97.28. Against the euro, the dollar was largely flat at $1.1798, paring earlier gains following Fed comments signalling caution on rate cuts. Investors weighed upcoming US PCE data and policy risks amid market jitters.

Oil prices slipped in Asian trading today, with Brent down 0.3% to $66.36 and WTI falling 0.3% to $62.10 per barrel. Markets weighed geopolitical tensions in the Middle East, intensified Ukrainian strikes on Russian energy infrastructure, and looming EU sanctions on Russian exports. Oversupply concerns from increased Iraqi exports and muted demand limited gains.

Equities on the move

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

Nvidia will invest up to $100 billion in OpenAI and supply it with data centre chips, strengthening ties between two leading AI players. The deal provides OpenAI funding and access to advanced hardware, while giving Nvidia a stake in its key customer. Analysts note potential circular investment concerns and broader antitrust scrutiny over market dominance.

TikTok’s U.S. operations will be divested from ByteDance in a deal President Trump will declare compliant with 2024 law. ByteDance will keep under 20%, with control going to U.S. and global investors, including Oracle and Silver Lake. Trump will formally certify the deal, requiring all U.S. user data to be stored on Oracle’s cloud.

Pfizer will acquire obesity drug developer Metsera for up to $7.3 billion, including milestone payments, aiming to strengthen its presence in the growing obesity treatment market. Metsera’s experimental drugs, including MET-097i and MET-233i, offer monthly dosing and promising early data. Shares jumped over 60%, with the deal expected to close in Q4 2025.

Porsche shares fell over 7% yesterday after the company cut 2025 profit margin guidance to a maximum of 2%, citing weaker EV demand, delays in its EV roll-out, and higher costs. Volkswagen, its parent, also lowered its outlook. Analysts highlighted the need to rebalance combustion and electric models, warning the correction will take time and investment.

SAP has offered concessions to address EU antitrust concerns over its ERP software, aiming to avoid an investigation and potential fine of up to 10% of global sales. The European Commission’s scrutiny focuses on complex licensing, application bundling, and switching barriers. Proposed remedies include greater flexibility for service contracts and easier migration to rival vendors.

Berkshire Hathaway has fully exited its 17-year investment in Chinese automaker BYD, which grew over twentyfold since 2008. The stake, valued at $415 million in 2024, is now recorded as zero. BYD, facing falling domestic sales and a reduced annual target of 4.6 million vehicles, reported its first quarterly profit decline in over three years.

Piper Sandler raised Tesla’s price target to $500 from $400, citing confidence in its AI and autonomous vehicle leadership after a China visit. Despite strong competition from Chinese EV makers, Tesla leads in AI-enabled capabilities. Deliveries are projected at 495,000 units in Q3 and 1.9 million in 2026, with upcoming catalysts supporting a premium valuation.

Morgan Stanley upgraded ASML to Overweight from Equal-weight, raising its price target to €950, citing potential earnings revisions and a cyclical recovery into 2026–27. Stronger memory demand, cost controls, and AI-driven wafer growth support upside, despite near-term caution. Shares rose 2.1%, with analysts highlighting beatable consensus estimates and attractive risk-reward.

BofA downgraded DHL to “underperform” from “neutral” and cut its price target to €35, citing weaker demand and falling earnings forecasts. Express volumes are expected to drop 10% in 2025, while Forwarding and Supply Chain divisions face ongoing pressure. Dividend support remains, but share buybacks may be unsustainable, signalling potential further share price downside.

Upcoming data and events

US markets focus on a busy data schedule Tuesday, with Federal Reserve Chair Jerome Powell speaking on monetary policy. Investors will also monitor September’s PMI for manufacturing and services ahead of Friday’s core PCE inflation release. Earnings highlights include Micron Technology and AutoZone.

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