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Brent Crude Hits Highest Close Since May; Analysts See Further Upside Towards $120

Oil prices extend gains: Brent crude recorded its highest closing level since May on Friday, as stalled US-Iran negotiations and attacks on tankers near the Strait of Hormuz heightened supply concerns.

Weekly gains in focus: Brent and US West Texas Intermediate (WTI) were on track for weekly gains as of October 16, according to market reports.

Further upside possible: Religare analyst Ajit Mishra said further escalation could push Brent crude towards $115–$120 per barrel.

Shipping risks support prices: Continued attacks on commercial vessels around the Strait of Hormuz are raising concerns over disruptions to a critical global oil transit route.

Supply measures provide limited relief: The price rally persisted despite G7 stock-release measures, according to analysts cited in the reports.

Inflation risks increase: Higher crude prices could lift transportation, manufacturing and energy costs, potentially adding to inflationary pressures worldwide.

Key takeaway: Geopolitical tensions and shipping disruptions are supporting crude prices. A further escalation could intensify inflation risks, although the $115–$120 target remains an analyst scenario rather than a certainty.

CITIC Securities Says AI Stock Correction Nears End; Markets Shift Focus From Inflation to AI Growth

AI correction nearing completion: CITIC Securities said the scale and duration of the recent correction in core AI stocks are approaching those of the Chinese new-energy stock downturn from late 2021 to April 2022.

Hardware valuation reset: The first round of valuation adjustments in AI hardware stocks may be nearing its end as expectations for the pace of growth in the AI supercycle moderate.

Key indicators to watch: Memory prices, GPU computing rental rates and cloud service providers’ profit margins will help assess whether underlying AI growth remains intact.

Inflation loses market influence: CITIC said US September CPI inflation of 3.7% year-on-year and PPI inflation of 6.3% failed to sustain upward pressure on long-term Treasury yields.

AI growth becomes a pricing anchor: The firm argued that markets are increasingly focused on the AI investment cycle and its potential slowdown rather than a conventional demand-driven recession. It cautioned that current pricing signals do not yet confirm a lasting trend.

Sector rotation possible: US equities could see capital shift from AI-related stocks toward energy, defensive consumer staples and healthcare, while Hong Kong stocks could benefit from a reversal in overseas AI hardware positioning and potential index-related reallocations.

Key takeaway: CITIC Securities believes the AI stock correction may be approaching its end, but the outlook depends on whether fundamental growth indicators remain resilient. Its assessment is a market view, not confirmation that the downturn is over.

Samsung to Use TSMC’s 3nm Process for NVIDIA’s Next-Generation HBM Base Wafers: Report

First reported collaboration: Samsung Electronics plans to use TSMC’s 3nm process to manufacture base wafers for NVIDIA’s next-generation custom high-bandwidth memory (HBM), Seoul Economic Daily reported.

NVIDIA’s requirements: NVIDIA has reportedly asked Samsung, SK Hynix and Micron to use TSMC’s process for NVHBM base wafers and adopt sixth-generation DRAM for the memory core dies.

Custom memory architecture: NVHBM integrates NVIDIA’s customised memory controller into the substrate, aiming to standardise implementation across multiple memory suppliers.

Samsung accepts proposal: Samsung reportedly agreed after an internal review but will continue producing standard HBM and custom memory products for other customers in-house.

Alternative production under review: Samsung is also evaluating whether its own foundry could manufacture NVHBM base wafers if demand exceeds TSMC’s available capacity.

Key takeaway: The reported arrangement could deepen cooperation between Samsung and TSMC while giving NVIDIA a more standardised supply chain for its next-generation AI memory technology.

NVIDIA Denies RTX 5090 Discontinuation, Says Shipments Will Continue Despite Supply Constraints

No discontinuation: NVIDIA Senior Vice President Jeff Fisher said the GeForce RTX 5090 has not been discontinued and remains a core product.

Supply constraints persist: Fisher acknowledged that capacity limitations across the supply chain continue to restrict availability.

Shipments to continue: NVIDIA plans to keep supplying the graphics card despite the ongoing constraints.

Company working to improve availability: Speaking at the RTX Spark launch event in Taipei, Fisher said NVIDIA is making efforts to ensure the product reaches the market.

Key takeaway: NVIDIA has reaffirmed its commitment to the RTX 5090, but supply-chain constraints could continue to affect availability.

Eurozone Inflation Hits 3.8%, Highest in Three Years; Lagarde Says No Need to Panic

Inflation accelerates: Eurozone annual inflation reached 3.8% in September, up from 3.2% in August, according to Eurostat’s final reading.

Energy drives price increases: Energy prices surged 18.8%, accounting for a significant share of the inflation increase.

ECB sees no second-round effects yet: President Christine Lagarde said the ECB has not observed clear evidence that higher energy costs are spreading into broader prices across the economy.

Long-term expectations remain anchored: While short-term inflation expectations have risen, medium- and long-term expectations remain broadly around 2%.

Two triggers for action: Lagarde said the ECB would need to act if medium- and long-term inflation expectations rise persistently or if clear second-round inflation effects emerge.

Key takeaway: The ECB is monitoring energy-driven inflation closely but sees no immediate need to change course unless inflation expectations rise further or higher energy costs spread more broadly through the economy.

South Korea Says Semiconductor Boom Could Last Through 2027

Boom expected to continue: South Korean Finance Minister Lee Hyung-il said the semiconductor industry’s growth cycle could continue at least through 2027.

Supply-demand gap remains wide: Lee cited strong semiconductor demand and a persistent supply-demand imbalance as key factors supporting the outlook.

Chip stocks drive volatility: He noted that semiconductor stocks have amplified fluctuations in South Korea’s equity market this year.

Heavy economic exposure: Semiconductors account for a larger share of South Korea’s economy than in many other countries, making the market particularly sensitive to chip-sector movements.

Economic fundamentals remain solid: Despite stock-market volatility, Lee said South Korea’s underlying economic fundamentals remain strong.

Key takeaway: South Korea expects the semiconductor upcycle to extend into 2027, although the sector’s large economic footprint continues to expose its stock market to significant swings.

$SKHY $KORU $SOXL

AI Debt Spreads Hit Record 360 Basis Points as CoreWeave Credit Risk Surges

Record borrowing spreads: Goldman Sachs said US high-yield AI-related debt spreads reached a record 360 basis points over US Treasuries, signalling rising investor risk concerns.

CoreWeave credit risk jumps: The company’s credit default swap (CDS) spreads briefly exceeded 1,140 basis points, indicating sharply higher perceived credit risk.

AI stocks slide: CoreWeave and Nebius shares fell as investors reassessed AI-related valuations amid growing expectations of interest-rate increases.

Hedge funds suffer losses: Global hedge funds recorded steep losses during this week’s AI sell-off, with Asia-focused managers hit particularly hard, Reuters reported.

Lending costs rise: Investors are demanding higher compensation to lend to AI companies, adding pressure on cloud-computing providers and other firms financing large-scale AI infrastructure investments.

Key takeaway: Rising AI borrowing costs and widening credit spreads point to increasing scrutiny of the sector’s debt-funded expansion, potentially putting further pressure on highly leveraged AI infrastructure companies.

Musk Says AI and Robots Are the Only Way to Solve US Debt Problem as Fiscal Deficit Hits $1.99 Trillion in FY2026, Highest Since 2021

AI as the solution: Elon Musk said artificial intelligence and robots are the only way to address the US national debt problem, arguing that spending cuts alone will not solve the fiscal challenge.

US deficit reaches $1.99 trillion: The US fiscal deficit hit $1.99 trillion in FY2026, its highest level since 2021.

DOGE reform experiment: According to Axios, Musk said his Department of Government Efficiency (DOGE) effort showed that the deficit cannot be solved from within the government.

Political resistance: Musk argued that the president, Congress and the Justice Department lack the willingness to make the spending cuts needed to address the problem.

Regrets time away from business: Musk acknowledged that he went too far and spent too much time away from his companies while serving in the White House for four months.

Focus on AI: He said he should have returned to his businesses sooner and concentrated on artificial intelligence, suggesting future AI advances could help tackle the debt challenge.

Key takeaway: With the US fiscal deficit at $1.99 trillion, Musk argues that AI-driven productivity gains and automation could help address the debt burden. This remains his view, not an established solution.

New York Fed Survey: Services Activity Weakens as Price Growth Hits Fastest Pace Since 2022

Business activity contracts: The New York Fed’s October Business Leaders Survey showed the regional services activity index falling 12 points to -20.7, its lowest level since March.

Selling prices accelerate: Firms reported the fastest increase in selling prices since 2022, highlighting persistent inflationary pressure.

Input costs rise: Business input costs continued to climb rapidly, while supply conditions deteriorated.

Employment flat: Hiring activity remained broadly unchanged during the survey period.

Capital spending weak: Capital expenditure remained subdued, signalling caution among regional service-sector businesses.

Outlook deteriorates: Firms were slightly pessimistic about the next six months, expecting a modest decline in activity while anticipating further increases in input and selling prices.

Market takeaway: Weakening services activity alongside accelerating price pressures presents a stagflationary signal, potentially complicating the Federal Reserve’s interest-rate decisions.

ECB Officials Lean Toward December Rate Hike as Policy Challenges Mount

December hike likely: European Central Bank officials are increasingly leaning toward a third interest-rate hike in 2026, with December emerging as the more likely timing.

October move not ruled out: Policymakers have kept the possibility of an October hike open, although traders and economists broadly expect action in December.

Bond yields rise: Higher government bond yields are adding to the challenges facing monetary policymakers.

Energy costs remain a concern: Elevated energy prices could intensify inflation pressures and complicate interest-rate decisions.

AI investment boom: Rapidly growing investment in artificial intelligence is emerging as another factor influencing the economic and policy outlook.

More complex outlook for 2027: Officials expect monetary policy trade-offs to become increasingly difficult next year as these risks interact.

Market takeaway: Expectations of another ECB rate hike could put pressure on European bond prices and influence the euro, while elevated energy costs and rising yields complicate the inflation outlook.

🚨 Anthropic co-founder Jack Clark says US GDP could reach $44 trillion by 2030 if AI spreads across the economy within the next year.

Chip Short Sellers Gain $32 Billion as Hedge Funds Dump AI Stocks

Short sellers profit: Traders betting against semiconductor stocks recorded approximately $32 billion in paper gains over seven days, as the PHLX Semiconductor Index fell for eight consecutive sessions, according to Bloomberg.

AI stock selling accelerates: Goldman Sachs data shows hedge funds have been net sellers of global AI stocks for five consecutive sessions.

Buying gains erased: The latest selling has wiped out hedge funds’ net buying of global AI stocks accumulated since early 2025.

Asia-focused funds hit: Asia-focused funds lost 6.8% in early October, according to Reuters.

Nasdaq under pressure: The Nasdaq Composite declined again on Friday as selling continued across technology and semiconductor stocks.

Market takeaway: Persistent semiconductor declines and rapid hedge-fund selling point to a broader unwinding of crowded AI trades, increasing volatility across technology stocks.

US Fiscal Deficit Hits $1.99 Trillion in FY2026, Highest Since 2021

Fiscal deficit widens: The US federal budget deficit rose by $217 billion year-on-year to $1.99 trillion in fiscal year 2026, the highest since FY2021 and the third-largest annual deficit on record.

Record revenue: Government revenue reached $5.40 trillion, up 3% from the previous fiscal year.

Record spending: Federal expenditure climbed 6% to a record $7.40 trillion.

Rising debt costs: Net interest payments increased 12% year-on-year to a record $1.36 trillion, adding to fiscal pressure.

Tariff revenue declines: Following a US Supreme Court ruling overturning most Trump administration tariffs, the government issued $145 billion in tariff refunds. Net tariff revenue fell 11% to approximately $173 billion.

Deficit-to-GDP ratio rises: The Treasury estimated the deficit at 6.2% of GDP, compared with 5.8% in the previous fiscal year.

September deficit: The US recorded a $27 billion deficit in September, versus a $198 billion surplus in the same month last year.

Market takeaway: The widening deficit and record debt-service costs could add to concerns about US Treasury issuance, long-term bond yields and the sustainability of federal borrowing.

US Stocks Close Lower as Nasdaq Falls 2.14%; CoreWeave Plunges Nearly 12%

- Major indexes: The Nasdaq Composite fell 2.14%, the S&P 500 declined 1.09%, and the Dow Jones Industrial Average dropped 0.34% on Friday.
- AI and semiconductor stocks slide: The Philadelphia Semiconductor Index fell nearly 4%, extending pressure across chipmakers and AI-related stocks.
- Biggest losers: CoreWeave plunged 11.91%, while Arm fell 6.94%, SanDisk dropped 6.85% and SK Hynix declined 6.58%.
- Major tech stocks weaken: Oracle fell 4.64% and Tesla lost 2.13%. Micron Technology and AMD also declined more than 5%, according to the reported market data.
- Chinese stocks fall: The Nasdaq Golden Dragon China Index dropped 1.3%, with Baidu down 2.93% and Alibaba falling 1.83%.

Market takeaway: Renewed selling in AI infrastructure and semiconductor stocks weighed on the Nasdaq, reflecting continued pressure on high-growth technology shares.

Nvidia CEO Jensen Huang Says AI Market Turmoil Will Eventually Pass

Long-term outlook: Nvidia CEO Jensen Huang said the current volatility in the AI market will eventually pass, arguing that AI will transform industries and economies worldwide.

Early stages: Huang believes AI development remains in its early stages and will continue to advance despite recent market turbulence.

Fundamentals unchanged: He said volatile market news does not alter the underlying fundamentals driving AI adoption.

Hardware investment: Huang expressed confidence that large-scale investments in AI hardware and infrastructure will eventually deliver returns and ease investor concerns.

Investor concerns: Recent sell-offs in AI chip and infrastructure stocks have raised questions about the sustainability of AI spending, particularly as borrowing costs rise.

Focus on the long term: Huang urged investors to concentrate on fundamental business drivers and long-term value rather than short-term market fluctuations.

Barclays Forecasts More Fed Hikes, Higher Oil Risks and BOJ Tightening

Federal Reserve: Barclays now expects 25-basis-point rate hikes in December 2026 and January 2027, revising its earlier forecast of a single December hike.

Oil prices: Barclays says near-term risks remain skewed to the upside, with higher oil freight rates potentially persisting for several weeks.

Brent crude forecasts: Barclays maintains its price projections at $100 per barrel for 2026 and $85 per barrel for 2027.

Bank of Japan: Barclays says Japan’s neutral interest rate could exceed 2%, citing BOJ board member Koeda’s remarks that the neutral rate may be well above 1%.

BOJ rate outlook: Barclays expects a 25-basis-point hike in December 2026, followed by further increases in March and July 2027, taking the policy rate to 2% by July 2027.

Silver plunges 6% in a single day, even as the world’s largest silver ETF adds 136 tonnes to its holdings.

The gold/silver ratio climbs back to 73, a key level in a four-year tug-of-war between the two metals.

$XAG $XAU

BofA: Equity Funds Attract $64.5 Billion in Weekly Inflows; Cash Outflows Hit $53.1 Billion

Equity funds: Recorded net inflows of $64.5 billion in the week ending Wednesday, according to EPFR data cited by Bank of America (BofA).

US equities: Attracted $39.1 billion, while technology equity funds received $10 billion.

Emerging markets: Stocks drew $17.7 billion, the largest weekly inflow since July. Brazil recorded a record $4.7 billion inflow.

US Treasuries: Attracted $3.6 billion, marking the 16th consecutive week of inflows.

Bond funds: Recorded total inflows of $11.8 billion.

Cash assets: Saw outflows of $53.1 billion, indicating a shift in investor allocations toward equities and bonds.

Market takeaway: Strong equity inflows may support risk assets, particularly US stocks, while sustained Treasury and bond-fund demand signals continued interest in fixed-income investments.

$SPY $QQQ

Jefferies Warns AI Investment Slowdown Could Hit US Economic Growth

Jefferies economist Mohit Kumar estimates that US capital expenditure on AI infrastructure could reach 2.5%–3% of GDP over the next three years, representing an unprecedented scale of investment.

Concerns are growing over the sustainability of the AI investment boom, much of which is being financed through debt.

The US dollar and Treasury yields fell as investors assessed the risks associated with elevated AI spending.

Kumar warned that any slowdown in AI infrastructure development could significantly affect suppliers and weigh on broader US economic activity.

The outlook highlights the growing importance of AI-related capital expenditure to US growth and the potential economic risks if investment momentum weakens.

Asian Markets Rebound: South Korea and Japan End Losing Streaks Despite Weekly Losses

South Korea: The KOSPI rose 2.05% to 5,668.05 on Friday, ending a seven-session losing streak as bargain hunting lifted stocks from a six-month low.

Despite the rebound, the KOSPI plunged 14.5% for the week, marking its third consecutive weekly decline and the steepest weekly fall since October 2008.

Thursday’s nearly 8% crash followed a sell-off in technology stocks triggered by higher-than-expected US inflation data and concerns over the sustainability of AI investment.

Japan: The Nikkei 225 gained 1.39% to 65,324.29, ending a six-session losing streak as AI-related stocks recovered. However, the index fell 5.37% for the week.

The broader Topix rose 1.67% to 4,066 but declined 0.95% over the week.

Investors remain cautious ahead of corporate earnings and next month’s US midterm elections, while assessing the outlook for AI-related investments and potential changes in US policy.