Stocks climb as oil prices dip heading into US CPI print
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Nov 10 : World stocks rose on Tuesday as a drop in oil prices after US President Donald Trump said he plans to hold off on new military strikes against Iran lifted sentiment ahead of US inflation data that could sway the near-term interest rate outlook.
Brent crude futures fell over 2 per cent, dipping below the $90 per barrel mark for the first time since late August, as investors pinned their hopes on possible peace talks between the US and Iran.
The pan-European STOXX 600 index climbed 0.5 per cent, coming within 1 per cent of its all-time high as lower oil prices helped ease some inflation concerns which have been on investors' radar since the US-Israeli war with Iran erupted at the end of February.
"The situation for Trump has changed politically with the midterms... that probably makes it more likely that he wants to come to an accord with Iran before he's held back by Congress," said Joost van Leenders, senior investment strategist at Van Lanschot Kempen Investment Management in Amsterdam.
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The slump in oil prices helped lift stocks after last week's rout as a sweeping victory by Democrats in the US midterm elections fed concerns that new regulations could dent the durability of the AI trade.
Futures tracking the S&P 500 inched 0.1 per cent higher after the cash index clocked its biggest one-day jump since April on Monday and the tech-heavy Nasdaq closed 2.7 per cent higher, its best day in over three months.
South Korea's KOSPI rose 4.4 per cent, while Japan's Nikkei gained 2.9 per cent. MSCI's broadest index of Asia-Pacific shares pushed 2 per cent higher, moving away from the seven-month low it hit last week.
Earnings reports due this week from tech companies including CoreWeave, a barometer of investor anxiety over AI, will be another test for markets as investors fret about the cost of the AI buildout and its profitability.
Meanwhile, details of Anthropic's blockbuster IPO, including plans by the AI company to raise nearly $70 billion, were briefly circulated to banks before being retracted late on Monday, according to emails seen by Reuters.
Claude operator Anthropic is expected to formally launch the roadshow on Tuesday, with pricing expected in the following week. A successful IPO is seen as critical for the AI trade, investors say, amid heightened scrutiny.
NVIDIA STILL IN FOCUS
Market focus remains on Nvidia after the world's second-most valuable company said its board was probing whether CEO Jensen Huang had been the target of a foreign intelligence operation.
A media report alleged he had a close relationship with a Chinese businesswoman who passed information to Beijing. Huang has said he was unfaithful to his wife without disclosing details.
Nvidia's shares gained 2 per cent in premarket trading after dropping 4.3 per cent on Monday. The company is also due to report earnings next week.
All eyes will be on US inflation data later in the day, with prices likely to have increased at a moderate pace in October, economists said, and remaining stubbornly high enough for the Federal Reserve to raise interest rates next month.
"The latest remarks from Fed officials reinforced the case for additional hikes, even as financial-market volatility and uncertainty around AI-related investment supported a deliberate approach towards further tightening," Deutsche Bank analysts said in a note.
Traders are pricing in an 82.2 per cent chance of a rate hike next month versus 74 per cent a week earlier, the CME FedWatch tool showed after a blowout October jobs report on Friday.
The 2-year note yield, which typically moves in step with Fed interest rate expectations, rose 3.3 basis points to 4.58 per cent. The US dollar inched 0.1 per cent lower against the euro and held steady against the Japanese yen.
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