After six straight months of gains for the S&P 500 and a seven-year high streak for the Nasdaq, investors appear to have rediscovered their appetite for risk, particularly the kind that comes with a glowing green logo and the promise of artificial intelligence. The market's new mantra seems to be: in AI we trust. The optimism stems from two intertwined developments. First, America and China have managed to call a truce, at least for a year, pausing reciprocal tariffs that had threatened to scupper global trade. It's a fragile detente, to be sure, but traders will take any excuse to buy the dip. Second, the "Magnificent Seven" of tech have reported earnings that hint at yet another surge in AI-related spending. For investors, it is as though the gold rush has gone digital, and the miners now deal in algorithms rather than axes.

Even so, there's a curious irony in Washington's newfound AI nationalism. President Trump's declaration that Nvidia's most advanced chips shall remain American - kept out of Chinese hands - may comfort security hawks but could, in time, complicate global supply chains further. Nvidia's share price rose nonetheless.

Corporate America has also been busy rearranging itself. Kimberly-Clark's $48.7 billion swoop on Kenvue - the maker of Tylenol - sent the latter's shares soaring 21%, while Kimberly-Clark itself suffered a 14% hangover. Investors love a bargain, but they rarely cheer the buyer. Elsewhere, Warren Buffett's Berkshire Hathaway delivered its usual homily in prudence: higher profits, record cash piles, and the sort of financial restraint that makes lesser CEOs appear as if they should be kept away from the corporate chequebook.

In the world of semiconductors, everyone is waiting for AMD and Qualcomm to update the congregation. Samsung also announced it is delaying its DDR5 pricing, helping lift data-storage stocks such as Seagate, Western Digital and Sandisk. And then there's IREN, a data-centre operator that leapt 22% after signing a $9.7 billion deal with Microsoft to supply Nvidia's GB300 processors.

But while Wall Street buzzes, Main Street remains fogged in by politics. America's second-longest government shutdown continues to disrupt official economic data. The Supreme Court will soon wade into the legality of Mr Trump's tariffs. 

As expected, the US corporate earnings season is better than expected. That's how it works in the financial world: executives announce targets they know they can beat, and when the company exceeds expectations, everyone pretends to think it's great. OK, that's a bit of an oversimplification, because the third-quarter results are certainly higher than expected, but they are also particularly good. FactSet has calculated that the average earnings per share of an S&P 500 company is up 10.7% between Q3 2024 and Q3 2025, at least after the publication of just over 60% of the companies in the index, including the largest ones. If something is wrong with the US economy, we will have to look elsewhere than large companies. The two sectors that contributed most to exceeding expectations are banking and technology, which will come as no surprise to most people. 

On this week's macro agenda, uncertainty still reigns over US statistics due to the shutdown. Two major central banks will adjust their monetary policy. The Bank of Australia and the Bank of England are expected to keep their key interest rates unchanged, as both countries face accelerating inflation.

On the corporate calendar, there are still plenty of figures to come this week. In the United States, Palantir, AMD, McDonald's and Airbnb are scheduled to report. In Europe, BP Plc, Novo Nordisk, AstraZeneca, Rheinmetall, Zurich Insurance and Engie are set to report.

The rise continues in Asia-Pacific, where Japan and South Korea are up more than 2%. Hong Kong is up 1%. Gains are more modest in Australia, India and Taiwan. European markets are mostly up.

Today's economic highlights: 

On today's agenda: China's Manufacturing PMI; Manufacturing PMIs from France, Germany, the Eurozone, and the United Kingdom; in the United States, the Manufacturing PMI, construction spending, and the ISM Manufacturing Index. See the full calendar here.

In corporate news:

  • CompoSecure reported strong Q3 earnings and raised its 2025 and 2026 revenue outlooks, while also announcing a $7.4 billion merger with Husky Technologies, backed by a $2 billion PIPE investment.
  • NIO delivered a record 40,397 vehicles in October, a 93% year-over-year increase.
  • Li Auto delivered over 31,000 vehicles in October but is recalling 11,411 MEGA 2024 EVs due to a coolant corrosion issue that could pose a fire risk.
  • Berkshire Hathaway posted Q3 earnings of $21,413 per class A share and $94.97 billion in revenue, both rising from the previous year.
  • Kosmos Energy swung to a Q3 adjusted loss of $0.26 per share as revenue dropped to $311.2 million, missing expectations.
  • Nexstar Media and Tegna received a second DOJ document request for their merger, extending the regulatory review timeline.
  • Belite Bio received UK regulatory acceptance to review a conditional approval request for Tinlarebant to treat Stargardt disease.
  • DOF Group and TechnipFMC secured contract extensions for three pipelay vessels from Petrobras, adding $100 million to their backlog.
  • Havilah Resources resumed copper and gold drilling at its Birksgate prospect in South Australia, boosting shares 4%.
  • Bank of America faces investor pressure to pursue dealmaking and expand in wealth management to close its performance gap with JPMorgan and Morgan Stanley ahead of its first investor day since 2011.
  • Deel appointed former Intuit executive Joe Kauffman as CFO to advance its IPO plans amid legal disputes with Rippling and rapid revenue growth.
  • Oil prices remained stable as OPEC+ announced it will pause production hikes in Q1 2026 due to oversupply concerns and weak Asian factory data.
  • Westlife Foodworld, the McDonald's operator in West and South India, reported a quarterly loss amid rising costs and tough competition despite modest sales growth.
  • Pony AI is pricing its Hong Kong IPO at HK$139 per share, seeking to raise HK$6.7 billion as it expands beyond its Nasdaq listing.
  • Chevron plans to explore offshore oil and gas in Guinea-Bissau in partnership with Petroguin, expanding its presence in the MSGBC basin.
  • Samsung SDI reportedly signed a $2.1 billion deal to supply Tesla with energy storage system batteries over three years.
  • New World Development launched a debt exchange offer worth up to $1.9 billion to restructure perpetual securities and improve liquidity.
  • Exxon Mobil warned it may exit the EU in response to a new sustainability law that could impose fines equal to 5% of global revenue.
  • Nvidia faces U.S. export restrictions on its Blackwell AI chip, limiting access for China and other countries.
  • ConocoPhillips has started natural gas drilling in Australia's Otway Basin, marking a new upstream investment.

Analyst Recommendations:

  • Apple Inc.: CTBC Securities Investment Service Co LTD upgrades to add from neutral and raises the target price from USD 237 to USD 301.
  • Builders Firstsource, Inc.: Stifel downgrades to hold from neutral and reduces the target price from USD 128 to USD 124.
  • Charter Communications, Inc.: Bernstein downgrades to market perform from outperform and reduces the target price from USD 350 to USD 280. 
  • Edwards Lifesciences Corporation: Raymond James upgrades to outperform from market perform with a target price of USD 96.
  • Ingersoll Rand Inc.: Stifel downgrades to neutral from hold and reduces the target price from USD 79 to USD 75.
  • Kilroy Realty Corporation: RBC Capital upgrades to outperform from sector perform with a price target raised from USD 40 to USD 47.
  • Meta Platforms, Inc.: ARC Independent Research upgrades to buy from hold and raises the target price from USD 815 to USD 855.
  • Mongodb, Inc.: William O'Neil & Co Incorporated initiates coverage with a buy recommendation.
  • Netflix, Inc.: KGI Securities Co Ltd upgrades to outperform from neutral with a target price of USD 1350.
  • Teradyne, Inc.: President Capital Management Corp upgrades to buy from neutral with a price target raised from USD 158.10 to USD 209.
  • Universal Health Services, Inc.: Raymond James upgrades to outperform from market perform with a target price of USD 269.999.
  • Alphabet Inc.: CITIC Securities Co Ltd maintains its buy recommendation and raises the target price from USD 230 to USD 310.
  • Apa Corporation: Evercore ISI maintains its in-line recommendation and raises the target price from USD 16 to USD 21.
  • Brown & Brown, Inc.: Raymond James maintains its outperform recommendation and reduces the target price from USD 120 to USD 90.
  • Cardinal Health, Inc.: TD Cowen maintains its buy recommendation and raises the target price from USD 183 to USD 225.
  • Coinbase Global, Inc.: B Riley Securities Inc. maintains its neutral recommendation and raises the target price from USD 185 to USD 243.
  • Exxon Mobil Corporation: Scotiabank maintains its sector outperform recommendation and raises the target price from USD 128 to USD 155.
  • First Solar, Inc.: Barclays maintains its overweight recommendation and raises the target price from USD 216 to USD 279.
  • Fmc Corporation: Morgan Stanley maintains its equalwt recommendation and reduces the target price from USD 38 to USD 17.
  • Match Group, Inc.: TD Cowen maintains its buy recommendation and raises the target price from USD 40 to USD 60.
  • Sandisk Corporation: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 96 to USD 230.
  • Sps Commerce, Inc.: Rothschild & Co Redburn maintains its buy recommendation and reduces the target price from USD 150 to USD 100.
  • Teradyne, Inc.: President Capital Management Corp upgrades to buy from neutral with a price target raised from USD 158.10 to USD 209.