Overnight U.S. Stocks | U.S. Treasury Sell-off Fails to Stop Stock Market Rally; All Three Major Indexes Close Higher, Nasdaq Hits Record High

According to Zhitong Finance APP, on Monday, despite the 10-year U.S. Treasury yield surging to its highest in more than 20 years, all three major U.S. indices closed higher driven by tech stocks. The Nasdaq reached a record high, and Nvidia's share price hit an all-time high of $240.098.

[U.S. Stocks] At market close, the Dow Jones Index rose 91.30 points, or 0.18%, to 51,268.26 points; the S&P 500 Index gained 51.27 points, or 0.66%, to 7,773.99 points; and the Nasdaq Composite added 286.45 points, or 1.05%, to 27,477.31 points. Nvidia (NVDA.US) gained 2%, Novavax (NVAX.US) surged 20%, Qualcomm (QCOM.US) fell 2%, and SpaceX (SPCX.US) rose over 7%. The Nasdaq Golden Dragon China Index closed up 1.7%, with Alibaba (BABA.US) rising 4%.

[European Stocks] European markets showed mixed performance; the pan-European Stoxx 600 Index closed up about 0.4%, while France's CAC40 Index fell 0.8%. Fiscal concerns continued to drag on the French market.

[Asia-Pacific Markets] The Nikkei 225 Index surged 2.4%, and Indonesia's Composite Index climbed 1.36%.

[Forex] The U.S. dollar index, which measures the greenback against six major currencies, rose 0.23% on the day, closing at 102.167 in late New York trading. By the end of the New York forex market, 1 euro traded at $1.1215, down from $1.1252 on the previous trading day; 1 pound exchanged for $1.3219, down from $1.3239 previously. 1 dollar exchanged for 158.00 yen, up from 157.80 yen; 1 dollar for 0.8307 Swiss francs, up from 0.8287 Swiss francs; 1 dollar for 1.4256 Canadian dollars, down from 1.4259 Canadian dollars; 1 dollar for 10.0403 Swedish kronor, up from 10.0366 kronor previously.

[Cryptocurrencies] Bitcoin approached $87,000 at one point and was quoted at $85,925 at press time; Ethereum fell 0.54% to $2,715.

[Precious Metals] Spot gold was priced at $4,141.17 per ounce; spot silver at $61.1 per ounce.

[Crude Oil] November delivery light crude oil futures on the New York Mercantile Exchange fell $1.68 to settle at $89.43 per barrel, a decrease of 1.84%; December delivery Brent crude futures in London fell $1.93 to close at $100.32 per barrel, down 1.89%.

[Macroeconomic News]

Trump Administration Reportedly Plans to Ease Restrictions on Tax-Exempt Diesel Use to Lower Fuel Costs. U.S. President Trump is preparing to ease restrictions on the use of a type of tax-exempt diesel, a latest effort ahead of November's midterm elections to reduce the cost of this key fuel. Sources say the Trump administration is expected to announce a plan on Monday regarding so-called "red-dyed diesel", allowing for more widespread use of red-colored or dyed diesel, often used for non-road purposes. Since red-dyed diesel is exempt from the 24 cent-per-gallon federal excise tax, any policy that broadens its usage—including for on-road vehicles—is expected to quickly translate into lower retail prices. Diesel prices have surged following Russia and Middle East wars, which have weakened refining capacity and reduced global oil product shipments. According to AAA, as of Sunday, the average U.S. retail price for diesel was $6.32 per gallon. Although this is down from last month's record high, farmers, truck drivers, and other users are still paying much higher costs than before. When the U.S. and Israel struck Iran in February, diesel was only $3.76 per gallon.

U.S. Business Activity Accelerates to Fastest Pace in Over Five Years: Strong Growth Accompanied by Rising Inflation. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated: "In September, U.S. business activity grew at its fastest pace in over five years, with demand growth and improved business confidence driving companies to expand output at the quickest speed in that time. Coupled with similarly solid manufacturing PMI performance, robust service sector expansion means U.S. economic growth in Q3 is set to hit around 4%. Accelerated growth in September also suggests momentum is picking up at the start of Q4. Technology companies reported their fastest growth in nearly four years, indicating the AI boom is boosting large tech firms. Other sectors were also encouraged, with faster growth reported by consumer-facing businesses, healthcare, alcohol, real estate, and financial services. However, there is growing concern that signs of economic overheating are becoming more prominent. Input costs surged, driven by higher service prices, with September's input cost inflation hitting a nearly four-year high. At the same time, higher fuel costs contributed to increased cost pressures, with corporate selling prices rising further, suggesting that inflation may continue to surpass the Federal Reserve's 2% target."

Media: Private Credit Fears Drive Fed Review of Large Banks. According to reports, the New York Federal Reserve has started visiting large banks to examine their lending to private credit firms and to gauge risk exposures in a sector that has raised concerns among investors and global policymakers. People familiar with the matter said that since spring, Fed officials have approached JPMorgan Chase, Wells Fargo, Barclays, and Morgan Stanley, discussing overall exposure, risk management, and collateral quality. These reviews are partly prompted by JPMorgan's March writedown of a large portion of its private credit portfolio, especially loans to software companies facing AI threats. The Fed has completed its review of several banks including JPMorgan. It is not unusual for the Fed to conduct in-depth reviews of banks' holdings, especially when the media frequently report potential risks. The Fed also routinely conducts on-site assessments and continually monitors banks' risk status.

Raw Sugar Futures Hit Near Two-Year High on Tightening Global Supply Concerns. Raw sugar futures extended gains as concerns about weather and production in major sugar-producing countries intensified, raising fears of a tighter global supply. The most active raw sugar futures in New York surged as much as 2%, reaching the highest level since December 17, 2024, continuing last week's nearly 8% rally. White sugar futures also climbed. The El Niño weather pattern is exacerbating supply concerns across the agricultural market, with sugar crops among the first expected to be affected. While the market initially expected a global sugar surplus earlier this year, weather risks are shifting that outlook. Chris Beauchamp, Chief Market Analyst at IG, a trading and investment platform, said: "Weather concerns are pushing up sugar prices recently, and they may test the August highs further." Excessive rainfall in Brazil, the world's largest sugar producer, is slowing sugarcane harvesting and crushing, while India—the world's second-largest producer—faces its weakest monsoon since 2015, likely leading to reduced sugar output. In Europe, the EU's agricultural resources monitoring unit expects beet yields to fall below the five-year average. Usually, declines in one region's production can be offset by increases elsewhere, but when multiple major producers suffer bad weather simultaneously, the safety cushion for supply may be weakened.

[Individual Stock News]

Nvidia Hits New High After Months; Analyst: Still More Room for Growth. With Nvidia (NVDA.US) shares hitting a fresh high for the first time in four months, analysts remain optimistic. Nvidia closed Monday at $237.58, setting a new high with a market cap of approximately $5.76 trillion. Wedbush analyst Matt Bryson said that as Nvidia comes closer to meeting future financial expectations, "the market is finding it increasingly difficult to ignore" the disconnect between its growth prospects and valuation. He noted the company is expected to grow at a 70% rate, yet the stock trades at less than 20 times next fiscal year's expected earnings per share, making it relatively cheap. Despite facing competition from peers and even its own clients, Nvidia remains the "foundation of AI infrastructure," wrote BNP Paribas analyst Karl Ackerman in a report last week. He raised his price target for the stock to $345 per share, which would represent a 45% upside from Monday's close.

Wall Street Syndicate Launches Record $60 Billion AI Financing Deal. Reportedly, Bank of America, Citigroup, and Morgan Stanley have begun syndicating $60 billion in debt financing to other banks in support of Anthropic's leasing of Google (GOOG.US) AI chips, marking the largest-ever chip financing deal. Of the total, around $42 billion is senior secured debt backed by Broadcom (AVGO.US) and began syndication on Monday; another $18 billion in unsecured debt, not backed by Broadcom, is expected to follow, with Blackstone committed to about $9 billion. The proceeds will fund Anthropic's chip orders in 2027, with lease payments due after chip delivery. Broadcom may also receive up to $42 billion in convertible notes from Anthropic to cover leasing expenses. This $60 billion deal is seen as a key test of market appetite for AI-related debt.

[Major Bank Ratings]

Melius Research: Upgrades Microsoft (MSFT.US) to "Buy," raises target price from $465 to $665.