AI RALLY UNDER PRESSURE: META AND TESLA EARNINGS AWAITED

• Concerns over whether AI-related revenues can justify massive investment costs have intensified selling in technology stocks. The Philadelphia Semiconductor Index fell 11.4% last week, highlighting mounting pressure across the sector.
• Investors are turning their attention to earnings from major technology companies, including Meta and Tesla, this week. Their planned AI spending will be closely watched for signs of whether the sector’s sell-off could continue.
• China’s economy grew 4.5% year-on-year in the third quarter, beating expectations. Industrial production rose 5.5%, while retail sales increased 1.1%. However, weak property investment continues to highlight challenges facing domestic demand.
• Bank of Japan Governor Kazuo Ueda said underlying inflation was approaching the central bank’s 2% target. The remarks keep potential rate hikes in focus ahead of the October 30 policy meeting.

RUSSIA SANCTIONS, THE STRAIT OF HORMUZ & EUROPEAN POLITICAL RISKS

• The US move to temporarily ease certain restrictions on Russian oil-related products weighed on oil prices. However, Washington indicated that the final decision had not yet been fully settled.
• A new tanker mine incident was reported in the Strait of Hormuz. Despite lower oil prices, the development highlights persistent geopolitical risks to global energy supplies.
• Intensifying cost-of-living protests in France added to political uncertainty. The developments remain a potential source of pressure on French government bonds and the euro.
• US Treasury yields declined amid safe-haven demand, with the 10-year yield falling to around 5.05%. This week, investors will focus on technology earnings, bond-market movements and central bank policy signals.