Global Stocks Eye 7th Monthly Rise: What Investors and Businesses Should Know Amid Dollar’s 3-Month High
World stock markets are on track for a seventh consecutive month of gains, while the US dollar remains near a three-month high. This momentum follows strong earnings reports from Amazon and Apple, which have boosted confidence in global technology sectors and the expectation that significant AI investments will drive future economic growth.
In Asia, Japan’s Nikkei index closed October with its largest monthly gain since 1990, rising 2% on the day and accumulating over 16.5% for the month. This surge was fueled by optimism around aggressive fiscal stimulus plans under new Prime Minister Sanae Takaichi. Despite many economist predictions, the Bank of Japan decided to keep interest rates unchanged this week.
Meanwhile, Chinese blue-chip stocks and Hong Kong’s Hang Seng index fell approximately 1.5% after data revealed China’s factory activity contracted at the fastest pace in six months during October.
In Europe, stocks dipped slightly following higher-than-expected eurozone services inflation figures, underscoring the European Central Bank’s recent stance against cutting interest rates. However, a survey from the ECB indicated a modest improvement in business conditions across the eurozone, with rising investments in artificial intelligence sectors.
US futures reflected renewed optimism, with Nasdaq futures climbing 1.2% and S&P 500 futures up 0.6%. Amazon’s shares surged over 11% after outperforming earnings expectations in pre-market trading, while Apple’s stock rose more than 2% on strong iPhone sales forecasts. These gains helped offset declines in Meta and Microsoft shares, which fell amid concerns over their escalating AI expenditures. Of the influential ‘Magnificent Seven’ US tech giants, six have reported earnings so far; only Nvidia, recently valued at $5 trillion, is yet to report in three weeks.
Major central banks’ recent meetings influenced market expectations. Notably, Federal Reserve Chair Jerome Powell dampened hopes for a rate cut in December. As a result, US Treasury yields increased, with two-year yields reaching 3.61% and 10-year yields surpassing 4.10%, both rising over 10 basis points this week. German 10-year Bund yields remained steady near 2.65%, experiencing a slight weekly increase.
The dollar benefited from elevated US yields, retesting three-month highs against major currencies at 99.58. The euro remained steady at $1.1556 despite the ECB’s cautiously positive outlook.
In trade developments, investors took profits following a truce between US President Donald Trump and Chinese President Xi Jinping. This agreement will reduce US tariffs on Chinese imports and ensure continued exports of rare-earth materials from China.
Morgan Stanley’s Chief Europe Economist Jens Eisenschmidt noted this week’s data may challenge previous assumptions about the impact of trade tariffs and emphasized the growth potential from AI investments.
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The sustained global tech optimism, driven by strong earnings from giants like Amazon and Apple and burgeoning AI investments, signals robust growth prospects for technology-driven sectors in Oman. Businesses and investors should capitalize on the growing AI and digital transformation wave, while remaining vigilant about potential volatility from shifting global trade dynamics and interest rate policies. Smart entrepreneurs would do well to focus on innovation and technological integration to stay competitive in this evolving market landscape.
