Global Markets Hit Record Highs on AI Boom, Rate Cut Hopes Despite U.S. Shutdown
Global stock markets ended the week on a strong note, with several indices touching fresh records as investors placed their bets on artificial intelligence (AI) and anticipated further interest rate cuts in the United States.
On Wall Street, the Dow Jones Industrial Average climbed 0.5% to close at 46,758.28, while the S&P 500 edged higher to 6,715.79, both setting new records.
The Nasdaq Composite slipped 0.3% to 22,780.51, weighed down by tech pullbacks, but remained close to its peak.
Analysts credited the rally to confidence that the Federal Reserve will ease borrowing costs again this month, despite political gridlock in Washington that has extended a partial government shutdown.
“Markets are clearly more focused on the Fed than on Capitol Hill,” said Joshua Mahony, Chief Market Analyst at Scope Markets.
“The lack of panic shows investors believe the shutdown will have little long-term impact on growth or interest rates.”
Europe and Asia follow Wall Street’s lead
London’s FTSE 100 surged 0.7% to a record 9,491.25, supported by bank and mining stocks. Paris’s CAC 40 added 0.3% to 8,081.54, approaching its March peak, while Frankfurt’s DAX 40 slipped 0.2% to 24,378.80 but stayed near historic highs.
In Asia, Tokyo’s Nikkei 225 jumped 1.9% to 45,769.50, boosted by tech gains after Hitachi announced a collaboration with OpenAI on artificial intelligence and energy solutions.
Hitachi shares surged more than 10%, pulling other Japanese tech firms higher. Hong Kong’s Hang Seng Index fell 0.5% to 27,140.92, while Shanghai’s exchange remained shut for a holiday.
AI and chipmakers fuel momentum
The AI-driven rally extended earlier momentum from semiconductor giants Samsung and SK hynix, which disclosed preliminary supply agreements with OpenAI for its Stargate project. Nvidia, the U.S. chipmaker whose valuation topped $4 trillion this year, eased slightly on Friday but continued to anchor optimism around AI investments.
Commodities and currencies
Oil prices strengthened, with West Texas Intermediate up 0.7% at $60.88 per barrel and Brent crude also gaining 0.7% to $64.53.
On currency markets, the euro rose to $1.1742 from $1.1720, while the pound climbed to $1.3482. The dollar firmed against the yen, trading at 147.45 yen.
Outlook
With 112 cases of shutdown-related delays, including the suspension of U.S. labor market data, investors will continue to track political developments in Washington.
However, analysts say optimism over AI and confidence in Federal Reserve policy remain the primary drivers of record-breaking market sentiment.
