Global markets rise ahead of central bank decisions and tech earnings

Rising on expectations

The world's major stock markets mostly rose on Monday: investors braced for a week packed with tech earnings and central bank decisions, while oil pulled back from a six-month high, AFP reports. Asian trading opened lower after Wall Street's Friday decline, though some markets recovered. In Europe, the main indices climbed through the day, and Wall Street opened higher: the Dow, S&P 500 and Nasdaq each gained 0.3%, the FTSE 100 rose 0.6%, the CAC 40 0.8%, and the DAX 1.0%. The Nikkei closed down 0.8%, the Hang Seng gained 0.5%, and the Shanghai Composite added 0.2%.

Focus on AI and earnings

Artificial intelligence remains in the spotlight: Anthropic announced on Monday its plans to sell shares on the stock market, which, according to AFP, will be a significant test of whether the AI boom can deliver profits. SPI Asset Management analyst Stephen Innes noted that the 'AI complex remains under the microscope' ahead of what may be the most important stretch of earnings season: investors want Microsoft, Alphabet and Amazon to prove that the billions invested in computing infrastructure are creating a sustainable source of profit. Earnings from South Korean chipmakers SK hynix and Samsung are also due this week. Tesla's and Meta's results last week intensified spending concerns that weighed on markets. Meta shares fell 1.3% after the company announced a $35 billion share offering to fund its AI ambitions, along with plans for an additional offering of up to $60 billion on an unspecified date. Briefing.com analyst Patrick O'Hare attributed the positive mood to lower oil prices and a rebound in 'AI trade' stocks, but added that it all 'looks a bit artificial'.

Oil and central banks

Oil prices fell moderately after Friday's rise of more than 3%, which was driven by supply concerns ahead of winter in the northern hemisphere. Brent dropped 0.8% to $115.80 a barrel, and WTI fell 1.4% to $101.87. This week brings monetary policy decisions from the Federal Reserve, the ECB and the Bank of Japan. Traders expect the Fed to keep borrowing costs unchanged on Wednesday, but the market will be looking for signals about its further intentions after last year's rate hike and amid inflation running well above the 2% target. The ECB is expected to hold rates, balancing between curbing inflation caused by the energy shock of the US–Iran war and supporting the eurozone economy. The Bank of Japan is forecast to wait as well, while the Bank of England, as widely expected, will raise rates in November after a spike in British inflation — ahead of Wednesday's budget statement.

Shock in Brazil

Brazilian markets were thrown into turmoil after the surprise weekend election victory of centre-left president Luiz Inácio Lula da Silva. The real plunged more than 10% against the dollar, and the São Paulo stock exchange halted trading for 30 minutes due to the collapse in prices, AFP reports.

What it means for investors

This week brings together several sources of uncertainty at once: decisions by the Fed, the ECB and the Bank of Japan, earnings from the biggest tech and chip companies, and Anthropic's stock market debut. For investors, the practical takeaway is that the results from Microsoft, Alphabet, Amazon, Samsung and SK hynix will show whether the massive AI investments are paying off, while the central bank decisions will set the cost of money for months ahead. Uncertainty remains: sources do not report details of Anthropic's IPO plans, and the date of Meta's possible additional $60 billion offering has not yet been set.