Bonds & Stocks
A rally in chipmakers sent stocks to all-time highs as Advanced Micro Devices Inc.’s deal with OpenAI added fuel to the artificial-intelligence frenzy. The S&P 500 rose for a seventh straight day, driven by the renewed advance in equities, with AMD soaring after the AI infrastructure agreement. The dollar rose and bonds fell, with long-term Treasuries underperforming amid growing fiscal concerns, while gold and Bitcoin hit record highs.
Economy
Treasury traders are turning to betting markets for signals on the length of the US government shutdown in the absence of economic data to guide interest rate expectations. Strategists at firms including Goldman Sachs and HSBC are flagging that odds in betting markets that the government closure could last more than 10 days are high. Wagers on online betting platform Polymarket give a 66% probability that the shutdown would last between 10 and 29 days, and 29% that it would linger for more than 30 days.
World
Over the weekend, Sanae Takaichi was elected as the leader of Japan’s ruling Liberal Democratic party. This means she’s also likely to become the country’s first female prime minister come the next election, expected shortly. The stock market reaction has been very positive. The Nikkei 225 closed up 4.8%, while the Topix closed up 3.1%. Meanwhile, the yen weakened sharply, breaking through the Y150 to the dollar mark. Yields on long-dated Japanese government bonds also rose.