AI optimism fuels Nasdaq and S&P 500 gains following Amazon's huge OpenAI deal; Asia stocks dip on profit-taking after the RBA keeps rates steady.
Profit-taking in Asia stocks, RBA holds rates with setback in US dollar
Key takeaways
- AI optimism drives U.S. gains: The Nasdaq 100 (+0.4%) and S&P 500 (+0.2%) extended their uptrend, supported by renewed AI enthusiasm following Amazon’s US$38 billion cloud deal with OpenAI.
- Weak market breadth: Only two of the 11 S&P 500 sectors advance, Consumer Discretionary (+1.2%) and Technology (+0.3%, while the Dow Jones fell 0.5%.
- Asia and FX mixed: Asian stocks saw profit-taking; the RBA held rates at 3.6%, keeping AUD/USD volatile near 0.6515 as the USD eased modestly.
Mixed performances were seen in the US stock market on Monday, 03 November. The Nasdaq 100 and S&P 500 have continued to bask in a bullish limelight, with positive gains of 0.4% and o.2% respectively, supported by the Artificial Intelligence (AI) optimism theme play.
Another major AI-related deal has emerged. Amazon.com Inc.’s cloud division has signed a seven-year, US$38 billion agreement to provide OpenAI with computing infrastructure, including access to hundreds of thousands of Nvidia GPUs.
Market breadth was weak, with only two of the 11 S&P 500 sectors closing higher; Consumer Discretionary rose by 1.2%, and Technology gained 0.3%. The Dow Jones Industrial Average underperformed, dropping 0.5%, while the small-cap Russell 2000 finished unchanged.
In today’s Asia session, profit-taking activities were seen across the board in the Asia Pacific stock markets. Japan’s Nikkei 225 declined by 1.8%, its first loss in the past eight sessions. Hong Kong’s Hang Seng Index wiped out an earlier gain of 0.5% and reversed down by 0.9% at the time of writing.
The Australian central bank, RBA, left its policy cash rate unchanged at 3.6% as expected. RBA Governor Bullock signalled that a combination of lingering inflation pressures and a steady job market raised the bar to further easing.
The AUD/USD pared back losses and whipsawed around the 0.6515 key support after the RBA’s press conference. The US dollar also retreated against other major currencies after four consecutive sessions of gains.
The US Dollar Index recorded an intraday decline of 0.1% led by a revival in Japanese yen (+0.5%) and the euro (+0.1%) against the greenback.
Gold (XAU/USD) has continued to languish as t failed to break above last Friday, 31 October’s high of US$4,047, and traded back down below the US$4,000 psychological level at US$3,994 with an intraday loss of 0.2% at this time of writing.
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Further reading: Monthly tactical view: AUDJPY, Japanese indices and silver in focus
