Key facts
- US Treasury yields reached 2002 highs.
- The Nasdaq Composite hit a new record high.
- Nvidia's stock is approaching a $6 trillion market cap.
- Brazilian stocks surged nearly 8% to a record high on election results.
- Gulf oil flows, excluding Iran, recovered to over 81% of pre-war levels in September.
Sovereign bond markets faced renewed pressure, with long-term US Treasury yields climbing to levels not seen since 2002, while US tech stocks continued their ascent, pushing the Nasdaq to a new record. This divergence occurred despite no clear triggers, fueled by an assumption that AI-driven economic expansion is ongoing and contributing to marginal inflation.
The September ISM services sector survey showed a slightly lower headline figure than forecast, but its price input component reached a four-year high. Reports also emerged of AI cross-financing between Broadcom and Anthropic, as Nvidia's stock approached a $6 trillion market capitalization.
In Europe, the French bond market showed signs of stabilization as investors awaited further developments in the country's budget process. Right-wing presidential candidate Marine Le Pen presented proposals for government spending cuts. Spain is set to hold a general election on November 29, contributing to market attention.
Brazilian markets experienced a significant rally, with stocks, bonds, and the real soaring after the first round of presidential elections. The results placed right-wing candidate Flavio Bolsonaro in a runoff against incumbent Luiz Inacio Lula da Silva on October 25. Brazil's Bovespa stock index recorded its largest daily gain since 2020, reaching a record closing high.
Data showed that Gulf oil flows, excluding Iran, surged to over 81% of pre-war levels in September. This increase was driven by a recovery in Saudi exports, despite attacks on the kingdom's oil infrastructure and escalating Iranian actions against regional shipping, while Iranian exports reportedly fell to zero due to a US blockade. Vortexa data indicated average daily flows of 19.2 million barrels per day from Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, and the UAE.