Global markets rise on AI chip demand as Wall Street retreats on inflation

World shares were mostly higher Wednesday after a retreat on Wall Street as U.S. inflation rose higher than expected in October, while U.S. futures edged higher and oil prices rose.

Global markets

In early European trading, Germany’s DAX rose 1 per cent to 26,621.01 after inflation fell to 2.8 per cent in October from a year earlier, according to the federal statistics office on Wednesday. The CAC 40 in Paris picked up 0.6 per cent to 8,331.94. Britain’s FTSE 100 added 0.7 per cent to 10,825.97.

In Asia, Taiwan led the regional markets as its benchmark Taiex rose 3.6 per cent. Taiwan Semiconductor Manufacturing Co., or TSMC, climbed 3.1 per cent after the AI chipmaker reported its October revenue was nearly sixfold higher than a year earlier, showing that demand for AI chips remains solid. TSMC’s board also approved up to US$1 billion in investment in Anthropic and OpenAI, according to a company statement Tuesday.

Japan’s benchmark Nikkei 225 advanced 1.3 per cent to 61,248.59. SoftBank Group’s shares pared losses to close 0.4 per cent lower as the investment giant reported a quarterly net loss of 1.1 trillion yen ($7 billion) on Tuesday after markets closed. South Korea’s Kospi was up 2.4 per cent to 5,365.75. Chipmaker Samsung Electronics gained 3.4 per cent and SK Hynix jumped 5.4 per cent.

In Hong Kong, the Hang Seng fell 1.1 per cent to 24,296.22, while the Shanghai Composite index recovered 0.5 per cent to 3,680.64. Australia’s S&P/ASX 200 edged 0.3 per cent higher at 9,153.20. India’s Sensex rallied 0.9 per cent, reaching its highest level in six months.

Wall Street and inflation

On Tuesday, the S&P 500 slipped 0.4 per cent and gave back some of its big rally from the day before. The Dow Jones Industrial Average dropped 0.3 per cent, and the Nasdaq composite sank 0.7 per cent. Pressure from the bond market undercut stocks following the discouraging report on inflation. People had to pay prices for groceries, electricity and other costs of living that were higher in October than economists expected. That could push the Federal Reserve to hike its main interest rate at its next meeting in December.

The yield on the 10-year Treasury leaped to 4.99 per cent from 4.88 per cent late Monday. The single heaviest weight on the S&P 500 was Nvidia, which fell 5.5 per cent. The chip designer has been under pressure since the company’s board announced an investigation into its CEO, Jensen Huang, following revelations of his affair with a purported Chinese spy. Trump said the FBI is investigating the affair, which Huang has acknowledged and apologized for.

Other developments

Anthropic said in a filing with U.S. regulators on Tuesday that the company is seeking a valuation of roughly $1.3 trillion. That would make it one of the most valuable companies on Wall Street, worth more than Walmart, JPMorgan Chase, ExxonMobil or Coca-Cola.

In other dealings Wednesday, the price of Brent crude, the international standard, rose 0.2 per cent to $91.71 a barrel. U.S. benchmark crude oil gained 0.1 per cent to $86.12 per barrel. The U.S. dollar rose to 158.88 Japanese yen from 158.70 yen. The euro fell to $1.1150 from $1.1171.

Why it matters

AI chip demand is supporting gains in Asian and European markets even as higher-than-expected U.S. inflation pressures Wall Street and raises the possibility of a Federal Reserve interest rate increase in December.

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Sources

• bnnbloomberg.ca: Stock market today: AI chip demand drives growth
• ctvnews.ca: Stock market today: AI chip demand drives growth

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.