Tech stocks gain as AI optimism returns, oil and yields cap broader market moves

Traders Union
All News
Financial News
Tech stocks gain as AI optimism returns

Highlights

Meta shares soar over 11%—their strongest one-day rally since April 2024—driving AMD to $1 trillion and lifting Intel 12.2% and Arm Holdings 17%.
Brent crude gains 1.4% to $101.67 per barrel as oil futures climb 12% in September and prompt crude prices in northwest Europe surge nearly 50%.
Dollar strengthens 0.26% to 157.7 yen after Federal Reserve and Bank of Japan rate hikes drive global yields higher, with the U.S. 10-year Treasury yield at 4.969%.

AI-driven rally lifts chip and platform shares

As reported by Reuters, the rebound in AI-linked stocks follows a sharp jump in Meta Platforms after strong uptake of its Muse AI assistant, launched two weeks ago. The move revives sentiment in a sector that came under pressure a week earlier after warnings from AI executives triggered a global selloff in related shares.

Meta shares jump more than 11% on Monday in their biggest one-day rise since April 2024, helping lift other AI-exposed names including AMD, which reaches the $1 trillion mark, while Intel and Arm Holdings rise 12.2% and 17%, respectively. In Europe, semiconductor stocks are among the few gainers on Tuesday even as the STOXX 600 falls 0.2%, after gaining 1% the previous day.

Kathleen Brooks, research director at XTB, says the move suggests demand for expensive AI tools remains strong and supports the hundreds of billions of dollars in capital expenditure by hyperscalers. She adds that broad adoption of Muse could increase demand for other AI tools and help the sector recover after a difficult few months.

Oil, yields and geopolitics restrain wider risk appetite

Nasdaq futures slip 0.1% after the index reaches record highs on Monday, while S&P 500 futures also edge down 0.1%, pointing to a more cautious tone outside the technology rebound. Investor attention is also turning to a meeting later this week between U.S. President Donald Trump and Chinese President Xi Jinping, with markets focused on whether the two sides can avoid a further deterioration in relations.

Xi arrives in Washington on Wednesday for the first time in more than a decade, raising hopes that the current trade truce between the world's two largest economies could be extended and that cooperation on artificial intelligence may emerge. Deutsche Bank strategist Jim Reid says the key question for markets is what happens when the one-year trade truce expires in November, adding that the tone remains constructive but no agreement is yet in place.

Brent crude rises 1.4% to $101.67 a barrel after falling more than 3% the previous day, when prices briefly drop below $100 for the first time in two weeks on expectations Trump could meet Iranian President Masoud Pezeshkian during the UN General Assembly. Even so, oil futures remain up about 12% this month, while prompt crude prices in northwest Europe trade above $130, nearly 50% higher so far in September.

With energy prices showing little sign of easing, investors price in another round of rate increases from major central banks, supporting the dollar and pushing global bond yields higher. The dollar rises 0.26% against the yen to 157.7, near a three-week high, after the Bank of Japan raises rates last week to a 31-year high but disappoints investors with two dissenting votes and no explicit hawkish guidance.

Matthew Ryan, head of market strategy at Ebury, says foreign-exchange intervention remains a blunt tool for supporting currencies and that, without a stronger monetary policy response, Japanese authorities may struggle to halt the yen's selloff. The Federal Reserve also raises rates last week and signals its inflation fight is not over, while the dollar index stays near a seven-week high and the U.S. 10-year Treasury yield edges up to 4.969%, close to its October 2023 16-year peak.

In our earlier coverage of Meta’s Muse AI-driven tech rally, we explained how the assistant’s strong early adoption helped propel Meta higher and pushed the Nasdaq to fresh record territory, lifting other megacap and AI-linked names as well. We also noted that the upbeat equity momentum was tempered by cross-asset risks, as oil-price swings and a busy geopolitical calendar around high-level meetings kept broader market sentiment in check.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.