Global Markets Daily: AI Optimism Lifts Equities, Commodities Strengthen, Bonds Steady

                                                      Source: Krish Capital Pty Ltd

Index Update

U.S. stock sentiment improved on renewed AI optimism, with Alibaba surging nearly 9% premarket after announcing increased AI investment, while Micron rose over 1% on strong earnings and outlook. Nvidia and Broadcom also traded higher, though investors remained cautious as Fed Chair Powell highlighted ongoing labor market and inflation risks and warned of elevated equity valuations.

Market Movers

On Tuesday, the top gainers were Super League Enterprise, Inc. (+159.45%), followed by Professional Diversity Network, Inc. (+66.43%). On the contrary Digital Brands Group, Inc. (-44.76%), and Boxlight Corporation. (-40.04%) declined the most the same day.

Commodities Update

WTI crude climbed toward $64 and Brent rose near $68 per barrel, extending recent gains after API data showed a 3.8 million-barrel drop in U.S. crude inventories, the largest in seven weeks. Supply concerns were further fueled by stalled talks to restart Iraqi Kurdistan exports, ongoing pipeline shutdowns to Turkey, and restricted Venezuelan shipments by Chevron under U.S. sanctions. Geopolitical tensions, including NATO’s warning over Russian airspace incursions and Ukrainian strikes on Russian energy infrastructure, also added support.

Gold advanced toward $3,770 per ounce, close to record highs, as investors weighed Fed Chair Powell’s cautious remarks on balancing inflation risks with a slowing labor market while still expecting further rate cuts this year. Safe-haven demand was reinforced by geopolitical uncertainty, particularly U.S. and NATO backing for Ukraine, alongside strong inflows into gold ETFs, which reached a three-year high.

Macro Updates

U.S. mortgage applications rose 0.6% in the week ending September 19, sustaining the near 30% surge from the prior week, the second-strongest since March 2020. The increase reflected another decline in mortgage rates to a one-year low, driven by weaker labor market data and plunging Treasury yields. Refinancing activity, highly sensitive to short-term rate changes, climbed 1% after a 60% spike the previous week, while applications for new home purchases were flat.

The average 30-year fixed mortgage rate for conforming loans fell to 6.34%, the lowest since September 2024, marking a fourth straight weekly drop. Rates tracked lower Treasury yields following the Fed’s 25bps cut and guidance for an additional 50bps of easing this year. Refinance demand continued to dominate, now 80% higher than four weeks ago and making up more than 60% of total application volume, according to the Mortgage Bankers Association.

Bonds Commentary

The U.S. 10-year Treasury yield held near 4.11% after a recent dip, as Fed Chair Powell struck a cautious tone on further easing, citing the challenge of balancing inflation control with a weakening labor market. While Powell noted tariff-driven inflation pressures have been modest, Fed Governor Miran warned that policymakers risk underestimating policy tightness and hurting jobs without deeper cuts. Markets now await the upcoming PCE price index for further clarity.

Futures Update

U.S. stock futures steadied Wednesday after a weak Wall Street session, with S&P 500 and Nasdaq futures up modestly while Dow futures were flat. The rebound followed losses in technology stocks that ended a three-day record streak, as investors weighed Fed Chair Powell’s cautious remarks, soft business activity data, and uncertainty over a potential government shutdown.