What moved
- US: As the session wraps, the Nasdaq is up 1.11% at 26,430.89 and the S&P 500 is 0.41% higher at 7,690.73. The Dow is the odd one out, 0.07% lower at 51,966.03. The Nasdaq is still 4.66% below its 52-week high.
- Europe: Every major index closed in the red. The FTSE 100 ended 1.08% lower at 10,764.69, the DAX fell 1.18% to 25,319.77 and the CAC 40 lost 1.11%.
- Asia: The Kospi closed 3.85% higher at 5,768.01, the Nikkei gained 0.76% and Shanghai added 0.63%.
Why
Wall Street bought back into AI. Last week's sell-off was driven by fears about how much debt companies are taking on to fund AI infrastructure. Today buyers returned to chipmakers, and the Philadelphia semiconductor index rose 3.7%. Amazon gained 5.2% after Morgan Stanley named it a top pick, and CoreWeave rose after Goldman Sachs upgraded it to buy. Oil helped too. WTI fell 3.0% to $98.37 on reports of a possible breakthrough in US–Iran talks, including an Iranian proposal to reopen the Strait of Hormuz. One thing does not fit the relief-rally story: Treasury yields rose anyway, and nothing in the day's news gives a clean reason why.
Europe had its own problem. Rioting spread across French cities over the weekend, set off by rising prices and failing public services. European banks fell 2.2% as a sector, led by the big French lenders. In London, Barclays lost 3.5% after the Financial Times reported that the Bank of England is examining whether it misclassified derivatives linked to illiquid private-credit loans. Miners also weighed on the FTSE: Anglo American fell 4.05% and Glencore 3.31% on mixed Chinese data and doubts about AI-driven metals demand.
Seoul shows how jumpy markets still are. The Kospi opened more than 3% lower before reversing. It was lifted by battery makers after reports that Chinese energy-storage companies are pulling out of the US market, and Samsung SDI rose 11.70%. Chip heavyweights lagged as doubts about AI profitability persisted.
Sentiment & risk appetite
Risk appetite improved, but only in a few corners. The VIX fell 7.75% to 18.44, yet it is still 20.76% higher over five days. Only three of the 11 S&P sector funds rose: consumer discretionary (+1.78%), technology (+1.36%) and materials (+0.06%). Utilities fell 2.01% and real estate 1.16%. Both are rate-sensitive sectors, and the 10-year Treasury yield rose 3.8bp to 5.136%. In Europe, PrimerIQ's own count shows 2,408 decliners against 1,284 advancers. The safe-haven trades gave mixed signals: gold eased 0.54% while the dollar index rose 0.15% to within 0.93% of its 52-week high.
Economic calendar
China set the tone overnight. Third-quarter GDP grew 4.5% year on year, ahead of the 4.4% forecast and up from 4.3% in the second quarter. Exports drove the growth while households stayed weak: September industrial output rose 5.5% but retail sales grew just 1.1%, and property remains a drag. In North America the calendar was light, with Canadian CPI at 08:30 ET and the NAHB homebuilder index at 10:00 ET. Nothing else is due today. The week's main releases are UK labour data on Tuesday, then UK and Canadian inflation and the October flash PMIs, all ahead of the Fed meeting.
Earnings
Fifth Third reported before the open. Reported EPS was $0.90, but it rises to $1.13 adjusted once Comerica merger charges and other one-off items are stripped out. That is ahead of the $1.09 consensus, and net interest income rose 49% from a year earlier as the Comerica deal fed through. After the close, Steel Dynamics reported EPS of $5.26 on record shipments of 3.8 million tons. That is below both its own September guidance of $5.34–$5.38 and the $5.42 consensus. The after-hours share reaction is still forming.