The Closer
Published
Wall Street's AI-driven surge, which pushed the S&P 500 up 1.6% on a semiconductor rally that swamped a hawkish Fed and a crude selloff, is now extending overseas. Asian markets rose broadly, with South Korea's Kospi jumping more than 2% behind Samsung Electronics and SK Hynix, and Taiwan's Taiex gaining 1.1% as investors positioned for what is expected to be a roughly 63% year-on-year surge in August export orders tied to AI demand. Meta's Muse AI platform added fuel to the Taiwanese tech complex, while LG Electronics said it completed Nvidia infrastructure qualification for its largest cooling units, feeding the AI-datacenter buildout theme further.
Oil, the other side of Monday's story, is stabilizing rather than reversing. Brent held near $100 and WTI slipped below $96 as Saudi Arabia increased loadings from the Persian Gulf and Strait of Hormuz flows improved, though Libya's Sharara field lost more than half its output to about 127,000 barrels a day after an armed group shut a pipeline, and Iran's Revolutionary Guard warned it could expand the conflict if the US escalates. A tanker was reportedly struck by an unknown projectile near the strait even as tensions eased on net. The UK agreed to provide Saudi Arabia defensive air-to-air refueling support, and France said it is ready to help secure Red Sea oil exports.
On the Fed, the hawkish tilt from Musalem deepened. Chicago's Goolsbee said elevated oil prices and tariffs could still force further hikes if inflation proves demand-driven, and Boston's Collins said persistent inflation and the Middle East conflict supported her vote for a 25-basis-point increase. Diesel above $6.50 a gallon and tightening motor-oil supplies are emerging as a bigger inflation risk than crude itself.
Attention is turning to Thursday's Trump-Xi summit, with US and Chinese officials holding a second day of trade talks in New York on AI, investment and rare earths, and USTR Greer reiterating a three-to-six-month truce extension is possible. Copper rose 1% toward its September 10 record on Chinese supply tightness, and gold rebounded 0.7% to $4,373.50 in Asia trade despite the hawkish Fed backdrop. Bitcoin slipped 0.7% to $86,335.
In after-hours moves, Ciena Corporation rose 2.6% while Labcorp fell 5.1%.