The S&P 500 and Nasdaq have climbed to record highs, not on roaring growth or robust balance sheets, but on the presumption that monetary easing will cushion the floor. Investors have developed a Pavlovian response: every bad headline is a good headline, every sign of slowing is an invitation to imagine cheaper money. This dependence on the Fed has markets shaking with volatility whenever Jerome Powell so much as clears his throat.

The shutdown in Washington has only sharpened this dependency. With the usual flow of government data cut off, investors are left squinting at scraps—an ADP report here, a Fed speech there. 

And yet, the market climbs. Tesla added over 3% in early trading, buoyed by the kind of optimism that seems to cling to Elon Musk's ventures regardless of the week's news cycle. Lithium Americas surged more than 20%, a reminder that the raw materials of the energy transition can still ignite the imagination of traders in ways that GDP growth numbers cannot. Meanwhile, the great credit bureau duopoly - Equifax and TransUnion - tumbled double digits after FICO unveiled a program that could make them look as outdated as phone books. 

Elsewhere, Intel is rumored to be courting AMD as a foundry customer, a pairing that would once have sounded as unlikely as Microsoft licensing operating systems from Apple. If it materializes, it would underscore a new age of semiconductor pragmatism: survival through collaboration, not domination.

The broader picture is that we're in an economy whose stock market depends so heavily on the promise of rate cuts is one that admits, implicitly, that it cannot bear the weight of borrowing costs at current levels. The market cheers weak job growth because it means cheaper money and rewards a car company for promising deliveries while ignoring the persistent flaws in its balance sheet. 

Still, optimism is difficult to extinguish, particularly when asset prices are rising. Traders may feign sophistication with algorithms and derivatives, but at the end of the day, they are chasing the same thing investors have always chased: the comforting illusion that tomorrow will be richer than today. Whether the Fed obliges them with a cut this fall remains to be seen.

In other news, European markets were shaken out of their torpor yesterday by the bullish surge in the healthcare sector, on the grounds that the Trump administration's treatment of the sector will be less punitive than expected. Meanwhile, one record after another is being broken on Wall Street, which has been largely unaffected by the country's budgetary paralysis, at least if it does not last too long.

The worst-case scenario imagined by investors for relations between the White House and the pharmaceutical industry did not materialize. As a result, the risk premium that made healthcare one of the worst-performing sectors on the stock market this year has been significantly reduced. Hence the surge in companies in the sector. 

Trump's strategy has worked again: the pharmaceutical industry will pay its share of customs duties while agreeing to reduce its sales prices in the United States in exchange for the administration dropping its most extreme threats. The White House is getting almost everything it wants. 

Well not exactly, since the Supreme Court has rejected Donald Trump's request for the immediate removal of Governor Lise Cook. The saga therefore continues. With regards to the shutdown, Vice-President JD Vance believes that an agreement could be reached in the short term, which would avoid layoffs in federal jobs. Financiers are not overly concerned if the deadlock does not last long. They would be more worried if the situation dragged on.

In Asia-Pacific, the theme of artificial intelligence is boosting technology stocks, particularly in South Korea. Samsung Electronics and SK Hynix have announced preliminary agreements with OpenAI to supply memory chips to the data centres of the Stargate AI infrastructure project in the United States. The KOSPI index gained 2.8% at the end of trading. Other markets are showing similar optimism: Sydney gained 1.1%, Tokyo around 1% and Mumbai 0.9%. Taiwan, another market rich in technology stocks, rose 1.6%. In Hong Kong, technology enabled the Hang Seng to post a third consecutive session of gains, up 1.6% and reaching a new high since 2021. The Chinese mainland market is closed until 8 October inclusive for Golden Week, a long traditional holiday period in the country. Europe is bullish, boosted by big pharma.

Today's economic highlights:

On today's agenda: the consumer price index in Switzerland; the unemployment rate in the eurozone; in the United States, Challenger layoffs, new jobless claims, durable goods orders, and factory orders. See the full calendar here.

  • Dollar index: 97,630
  • Gold: $3,887
  • Crude Oil (BRENT): $65.01 (WTI) $61.45
  • United States 10 years: 4.10%
  • BITCOIN: $119,205

In corporate news:

  • Rivian beat quarterly delivery estimates with a 32% surge in Q3 EV deliveries, driven by buyers rushing to secure expiring U.S. tax credits, though future margins face pressure from rising costs and tariffs.
  • China's top state banks, including Bank of China and ICBC, lent over $3.75 billion to Aramco's Jafurah gas project, while Chinese funds avoided the BlackRock-led equity deal due to U.S.-China tensions.
  • A Dutch court ordered Meta Platforms to simplify opting out of profiled timelines on Facebook and Instagram, ruling current defaults violate EU digital laws; Meta plans to appeal.
  • S&P Global appointed Catherine Clay, formerly of Cboe Global Markets, as CEO of S&P Dow Jones Indices, while Chief Digital Solutions Officer Swamy Kocherlakota will depart by year-end.
  • Microsoft committed $33 billion to boost AI data center capacity via partnerships with neocloud firms like Nebius and CoreWeave, including access to over 100,000 Nvidia chips.
  • Xylem will sell its international water metering business to Aurelius, retaining its North American operations, with the deal closing in Q1 2026.
  • CME Group reported its second-highest average daily volume ever for Q3 and September, including significant crypto contract volumes.
  • Restaurant Brands plans to open over 300 Popeyes restaurants in Mexico through multiple franchise partnerships, expanding its international footprint.
  • Occidental Petroleum will sell its OxyChem unit to Berkshire Hathaway for $9.7 billion to reduce debt and refocus on oil and gas operations.
  • Tyson Foods agreed to pay $85 million to settle a lawsuit alleging it conspired to inflate pork prices by restricting supply from 2009 to 2018.
  • Alibaba repurchased 17 million shares for $241 million in Q3 under its ongoing buyback program.
  • Electronic Arts was acquired in a $55 billion buyout led by Saudi Arabia's PIF, Silver Lake, and Affinity Partners, spotlighting the growing value of gaming IP for cross-media expansion.
  • Google reported that a ransomware group is sending extortion emails citing a breach of Oracle systems, though it hasn't confirmed the claims.
  • Fair Isaac (FICO) launched a direct licensing model for FICO Scores that allows mortgage resellers to bypass the three major credit bureaus, potentially cutting costs by up to 50% and pressuring the margins of Equifax, Experian, and TransUnion.
  • PAI Partners raised $4.2 billion from investors including Goldman Sachs and the Abu Dhabi Investment Authority to further invest in Froneri, its ice cream joint venture with Nestlé, valuing the business at €15 billion.
  • OpenAI became the world's most valuable startup at $500 billion after a $6.6 billion secondary share sale to investors including T. Rowe Price, SoftBank, and Thrive Capital.
  • Honeywell completed a $1.68 billion deal to offload its legacy asbestos liabilities to Delticus, eliminating future exposure and boosting cash flow ahead of its planned corporate split.
  • Li Auto delivered nearly 34,000 vehicles in September, bringing its Q3 total to over 93,000 units and its 2025 cumulative total to 1.4 million units.
  • Apple and OpenAI filed a motion to dismiss a lawsuit by Elon Musk's xAI, denying claims of anti-competitive behavior in AI app distribution through the App Store.
  • Warner Music Group and Universal Music Group are nearing AI licensing deals with Google, Spotify, and tech startups, aiming to monetize music use in generative AI models.
  • Netflix's animated film "KPop Demon Hunters" became its top English-language movie and the U.S.'s most-consumed soundtrack of 2025, with over 5.4 billion minutes watched and breakout song “Golden” topping the Billboard Hot 100.
  • OpenAI valuation reaches $500 billion after share sale; partners with Japan's Digital Agency.
  • Tesla sees increased Q3 deliveries due to expiring US EV credit; Elon Musk's net worth hits $500 billion.
  • General Motors reports a 7.7% increase in U.S. auto sales in Q3.
  • Toyota Motor Corp announces a 16% increase in U.S. sales for Q3.

Analyst Recommendations:

  • American Tower Corporation: RBC Capital downgrades to sector perform from outperform and reduces the target price from USD 260 to USD 220.
  • Bloom Energy Corporation: Mizuho Securities downgrades to neutral from outperform and raises the target price from USD 48 to USD 79.
  • Corteva, Inc.: JP Morgan upgrades to overweight from neutral with a target price of USD 70.
  • Crown Castle Inc.: RBC Capital upgrades to outperform from sector perform and reduces the target price from USD 113 to USD 112.
  • Dell Technologies Inc.: GF Securities Co. Ltd. upgrades to buy from hold with a price target raised from USD 130 to USD 175.
  • Electronic Arts Inc.: Roth Capital Partners downgrades to neutral from buy and raises the target price from USD 185 to USD 210.
  • Knight-Swift Transportation Holdings Inc.: Deutsche Bank upgrades to buy from hold and raises the target price from USD 43 to USD 53.
  • Nike, Inc.: KeyBanc Capital Markets upgrades to overweight from sector weight with a target price of USD 90.
  • Stellantis N.v.: Banca Akros (ESN) upgrades to buy from accumulate and raises the target price from EUR 9.50 to EUR 10.50.
  • Aerovironment, Inc.: Stifel maintains its buy recommendation and raises the target price from USD 295 to USD 389.
  • Alphabet Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 230 to USD 285.
  • Alphabet Inc.: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 210 to USD 270.
  • Apple Inc.: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 240 to USD 298.
  • C.H. Robinson Worldwide, Inc.: Deutsche Bank maintains its buy recommendation and raises the target price from USD 124 to USD 159.
  • Citigroup Inc.: Evercore ISI maintains its in-line recommendation and raises the target price from USD 87 to USD 105.
  • First Solar, Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 212 to USD 260.
  • Halozyme Therapeutics, Inc.: Leerink Partners maintains its underperform recommendation and raises the target price from USD 51 to USD 70.
  • Insmed Incorporated: TD Cowen maintains its buy recommendation and raises the target price from USD 154 to USD 193.
  • Kratos Defense & Security Solutions, Inc.: Citizens maintains its outperform recommendation and raises the target price from USD 70 to USD 105.
  • Micron Technology, Inc.: Arete Research maintains its buy recommendation and raises the target price from USD 154 to USD 230.
  • Norfolk Southern Corporation: Deutsche Bank maintains its buy recommendation and raises the target price from USD 290 to USD 354.
  • Upstart Holdings, Inc.: Jefferies maintains its hold recommendation and reduces the target price from USD 73 to USD 56.
  • Warner Bros. Discovery, Inc.: Raymond James maintains its outperform rating and raises the target price from USD 13 to USD 22.