• Asian markets are trading higher on Tuesday after Wall Street’s technology-led rally pushed the Nasdaq to a fresh record close. Japan’s Nikkei is gaining around 0.7%, while the broader MSCI Asia-Pacific index is also moving higher as investors continue to favor technology and AI-related stocks.
• U.S. equities ended Monday with strong gains. The Nasdaq Composite climbed 1.1% to a new record, while the S&P 500 gained 0.7% and the Dow Jones advanced 0.2%. Nvidia reached another record high, with its market capitalization approaching $5.8 trillion, reinforcing the strength of the AI-driven rally.
• U.S. equity futures are holding slightly higher in early trading, with Nasdaq futures up around 0.2% and S&P 500 futures gaining around 0.1%. The softer U.S. labor-market data released last week continues to reduce expectations for an October Fed rate hike, helping maintain support for risk assets.
• Despite the strength in equities, U.S. Treasury yields remain elevated. The 10-year yield is around 5.35%, while the 30-year yield is near its highest level since 2002. Rising long-term yields remain a potential headwind for technology valuations, although the equity market has so far shown limited sensitivity to the move.

OIL, GOLD & EUROPE: FISCAL AND GEOPOLITICAL RISKS REMAIN IN FOCUS

• Oil prices are easing as increased Middle Eastern exports help improve the near-term supply outlook. Brent crude remains around the $100 per barrel level, while WTI is trading near $90. Expectations for higher supply are helping offset some of the geopolitical risk premium created by the ongoing conflict in the region.
• Gold is under pressure from elevated U.S. Treasury yields and a stronger dollar. The combination is reducing demand for the non-yielding asset, although geopolitical uncertainty and expectations for a more accommodative Fed continue to provide some underlying support.
• European markets are facing a different set of risks, with political and fiscal concerns weighing on sentiment. France remains under pressure as investors assess the country’s budget situation, while Spain’s decision to call a snap election has added another layer of political uncertainty across the euro zone.
• The euro has weakened toward a 17-month low near $1.116 as concerns over French finances and Spanish political uncertainty increase. The DAX and broader European equities remain sensitive to developments in sovereign bond markets, while investors are also watching euro zone economic data and upcoming ECB communication for clues on the region’s policy outlook.