This Week
With the shutdown continuing, the key event of the economic week may be Tuesday’s speech by Fed Chair Jerome Powell. Wednesday’s scheduled US inflation data is unlikely to be published, but should be released before the Fed meeting on October 29. Geopolitical focus will be on the US after President Trump suggested over the weekend that there is time to resolve the trade issue with China, and on the Middle East as a summit attended by Trump, European, and Arab leaders takes place on Monday in Egypt to discuss lasting peace and regional cooperation.
Stocks
AMD
AMD’s price surged 30% to an all-time high amid optimism over AI after the company announced a multi-year strategic partnership with OpenAI to supply AMD GPUs for AI deployment. The deal could be worth billions of dollars and see OpenAI acquire almost 10% of the company. Brokerages upgraded their coverage of AMD’s stock price, citing increased projected revenue amid expectations that AMD could close the gap against market leader NVIDIA. The company’s estimated earnings date is November 4.
NETFLIX
Netflix’s stock price jumped 5.17% to a one-month high, its highest level in over two months, as the stock price rebounded from last week’s near six-month low. Some of that move might have been triggered by Elon Musk stating he was cancelling his Netflix subscription, urging others to do the same. The move higher was driven by optimism that Netflix’s ad-supported tier could generate over $3 billion in revenue, prompting some investors to position themselves ahead of the company's earnings. The company is set to release new content from October, including its hit series Stranger Things. Netflix is expected to post its earnings on October 21st.
Commodities
Crude Oil
Crude oil prices slipped 5.3% to record their second consecutive week of sharp losses after the first phase Israeli-Hamas peace deal reduced the chances of supply disruption in the oil-rich Middle East. Early in the week, the market reacted to OPEC’s decision to slightly raise oil output from November, while midweek US inventory figures suggested that US demand declined over the previous week. Oil markets were pressured by weaker demand amid potential oversupply concerns.
Gold
Gold prices climbed 2.7%, beyond the psychological $4000 level for the first time, as demand for the safe-haven metal remained strong amid ongoing uncertainty surrounding the US government shutdown. Global central banks, including China’s continued purchasing of gold, are underpinning demand for the metal. While the peace deal in the Middle East prompted a small pullback, gold prices rose again on Friday over fears that a renewed US-China trade conflict could flare up.
Palladium
Palladium prices surged 12.0% to a more than 2-year peak after investors rotated into other precious metals after gold hit record levels. The rally was driven by expectations that Fed rate cuts would weaken the dollar and make palladium more attractive. Additional support came from fears of supply disruptions in Russia and South Africa. Signs of a recent recovery in global car production also boosted the metal.
USD/JPY
The USD/JPY ended the week 1.07% higher as the yen continued to be pressured by the election of new LDP leader and likely future Prime Minister Takaichi, whose monetary policies are seen as rejecting short-term interest rate hikes. In the US, a lack of data added to volatility, but traders moved to the safe-haven greenback on Friday after President Trump’s comments threatened to reignite a trade conflict with China.
Recap
Last week, the S&P 500 fell 2.4%, the Nasdaq was down 2.5% and the Dow Jones dropped 2.7%.
US stock indices turned sharply lower on Friday after trade relations with China soured as the US government shutdown dragged on. In geopolitics, President Trump threatened “massive” tariffs against China, stating the country was holding the world captive due to its control of rare earth minerals. The news overshadowed earlier positive sentiment following a peace agreement signed between Israel and Hamas on Thursday.
Crude oil prices dropped to multi-month lows, and Natural Gas prices sank to their lowest levels in two weeks. Gold prices continued their long-term climb, hitting another record high, while silver hit a multi-year high. Platinum prices were slightly lower, while Palladium prices remained on the upside by Friday’s close.