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Global stock markets attempted to bounce back at the start of the week following a volatile period and a postelection slump driven by midterm election results. US equities opened higher on Monday, with the Dow Jones Industrial Average gaining 619 points, or 1.2%, shortly after 9:30 a.m. ET, while the S&P 500 advanced 0.9% and the Nasdaq Composite rose 0.8%.
Market Sentiments and Analyst Views
Stocks connected to artificial intelligence faced pressure last week following a larger-than-expected victory by Democrats in the midterm elections. However, Oppenheimer chief investment strategist John Stoltzfus expressed optimism in a Monday note reported by US Top News and Analysis (cnbc.com), stating that the market can recover as long as fundamental economic drivers remain intact. Stoltzfus noted that investors will focus on the upcoming Tuesday inflation report and last Friday’s jobs report to gauge the Federal Reserve’s next steps on interest rates at its December meeting. Addressing concerns regarding artificial intelligence, Stoltzfus stated that it is far too early to predict the failure of AI to gain traction or achieve profitability.
Meanwhile, Citi tactically downgraded the United States, Global Tech, and European Tech sectors to neutral from overweight in a Monday note. Beata Manthey at Citi stated that while fundamentals appear attractive, market positioning remains relatively neutral and could experience further adjustments, adding that the firm remains constructive on artificial intelligence over the medium term.
Nvidia Investigates CEO and Tech Moves
Nvidia shares dropped nearly 5% in premarket trading after the tech giant launched an investigation into co-founder and CEO Jensen Huang’s relationship with a businesswoman, identified as Alice Huang, whom intelligence agencies allege is a Chinese spy. Jensen Huang informed staff in a Sunday email that he had an affair with the woman and that the board of directors opened an independent investigation into the allegations. An Nvidia spokesperson stated that Huang remains committed to continuing as CEO without interruption.
Dan Ives, senior managing director at Yorkville Ives & Co., remarked that the situation creates a difficult moment for the executive and could spark congressional inquiries, placing an overhang on the stock. Concurrently, Advanced Micro Devices shares advanced 3.2% after Oppenheimer upgraded the chipmaker to outperform from market perform and assigned a $600 price target. Analyst Rick Schafer cited bullish earnings and multi-generation customer wins in data centers as key drivers for the upgrade. Eli Lilly shares also increased nearly 2% after Canada’s Drug Agency issued a positive reimbursement recommendation for its early Alzheimer’s treatment, Kisunla.
Global Stock Exchanges and Corporate Activity
European stocks displayed a mixed start on Monday, with the Stoxx 600 index gaining 0.4% by 8:20 a.m. in London, driven by a 1.7% rise in mining stocks as gold and copper prices recovered. UniCredit emerged as a top performer, surging 4.7% after reporting a record third-quarter net profit increase of 24% year-on-year to 3.3 billion euros and raising its full-year profit guidance. In France, Crédit Agricole proposed a merger of its Italian operations with Banco BPM to create Italy’s third-largest banking group, offering shareholders a 20% premium and a special dividend.
Asia-Pacific markets closed in broadly positive territory on Monday, supported by a regional tech rebound. The Taiwan Weighted Index jumped 4.94% in its largest single-day gain since July 31, powered by heavyweight firms like Taiwan Semiconductor Manufacturing Company and Hon Hai Precision Industry. Japan’s Nikkei 225 closed 2.33% higher at 58,775.5, while South Korea’s Kospi declined 0.81%. In China, producer prices grew at their fastest rate in over four years with the October PPI coming in at 5.7%, while consumer inflation slowed to 0.7%.
Cryptocurrency Markets and Geopolitical Developments
In cryptocurrency markets, Bitcoin dropped below $74,000 over the weekend to its lowest level since August before recovering some ground. Matt Maley of Miller Tabak + Co. noted that a break below the $75,000 level represents a lower low, though a drop past the 200-day moving average near $73,000 would be required to trigger more serious warning flags. Ether, XRP, and other digital assets also saw declines.
In geopolitical news, U.S. Secretary of State Marco Rubio criticized Iranian demands as outrageous and ridiculous while speaking to reporters in Florida ahead of a trip to Paris for the G7 foreign ministers’ meeting. Rubio stated that the two sides remain far apart after Tehran proposed shortening the timetable for restarting talks from seven days to two, adding that President Donald Trump prefers diplomatic resolutions whenever possible.
