A plan backed by Donald Trump to restrict US states from regulating AI companies has provoked a backlash from prominent Republicans and Maga supporters, and accusations that he has caved to Big Tech donors.The US president on Tuesday called for “one Federal Standard instead of a patchwork of 50 State Regulatory Regimes” to support the sector’s growth, despite vehement opposition from some Republican senators and governors.The White House is even considering an executive order that would potentially withhold federal funds from states who attempt to pass AI laws, according to a person familiar with the matter.Trump’s backing of a federal framework — a priority for Silicon Valley lobbyists who fear restrictions on AI from some states — came two weeks after a group backed by venture capital firm Andreessen Horowitz and an OpenAI co-founder was formed in Washington in part to fight state-led legislation.Build American AI’s leader Nathan Leamer visited the White House just hours before Trump announced his decision to back the move that had already ignited outrage among some Republicans.
▸ US tech stocks experience turbulent trading amid valuation concerns▸ Worries persist despite optimism over Nvidia earnings as Vix fear gauge rises▸ European stocks close higher, led by Germany’s Dax indexUS tech stocks dropped yesterday in turbulent trading as optimism over Nvidia’s robust earnings was overshadowed by a fresh bout of fears over lofty valuations for artificial intelligence companies.The Nasdaq Composite was down about 1.2 per cent in afternoon trading in New York, giving up a gain of more than 2 per cent. The S&P 500 was down0.9 per cent.Shares in Nvidia — seen as a bellwether for the boom in artificial intelligence — had initially rallied more than 5 per cent after the group posted better than expected quarterly results late on Wednesday, but slumped 1.1 per cent later in the session.The Vix index, Wall Street’s so-called fear gauge, soared from about 20 to 28 in the course of two hours, a sharp move that underscored the abrupt bout of volatility that jolted US equities markets.
Domestic investors have fled the stock market at a record rate this year, missing out on a storming rally in which London has outpaced both US and European bourses.UK investors have pulled about £26bn from London-listed equities in 2025, according to EPFR data, the highest level on record for a calendar year as measured by outflows from funds investing in the country.Nevertheless, the FTSE 100 is on course for its best year since its rebound from the global financial crisis in 2009, driven in part by foreign investors looking to diversify their exposure beyond the US and to relatively cheap valuations on the London market.“The UK equity market is the unexpected winner of 2025 but UK investors don’t seem to care,” said Emmanuel Cau, head of European equities strategy at Barclays.UK investors pulled £3.4bn from London stocks via fund withdrawals in October alone, the biggest monthly outflow of the year.Analysts attributed the moves in part to next week’s Budget, which is likely to involve tax rises and has prompted investors to sell out of the market and boost their cash reserves.
▸ US stocks edge higher in advance of high-stakes Nvidia earnings▸ Delay to jobs data suppresses momentum for American indices▸ European stocks close flat after shaking off early lossesUS stocks edged higher in choppy trading yesterday, in a session characterised by anticipation ahead of a high-stakes Nvidia earnings alongside nerves about the state of the US employment market.The Nasdaq Composite rose as much as 1.7 per cent in early trading yesterday morning, but fell back later in the day following the announcement that crucial US employment data for October would not be released as expected.By early afternoon in New York, the Nasdaq Composite and the S&P 500 were both 0.1 per cent higher.The Bureau of Labor Statistics, responsible for the closely watched jobs data that traders use to gauge US interest rate expectations, said it will not publish its October employment report this week as planned, due to the recent US federal government shutdown hampering data collection.
Former prime minister Rishi Sunak has been appointed as a senior adviser to both Microsoft and artificial intelligence start-up Anthropic, becoming the latest British politician to take a Silicon Valley role.Sunak, who will remain an MP, worked with both tech groups as prime minister, setting up an AI safety summit in 2023.The former Conservative leader yesterday said he had “long believed that technology will transform our world”.“In my role as a senior adviser, I want to help these companies ensure that this shift delivers the improvements in all of our lives that it can,” he added.Sunak’s twin appointments mean he will be advising rivals in the push for AI breakthroughs. Microsoft is working on its own AI tools and is a key backer of OpenAI, Anthropic’s chief competitor.He follows former deputy prime minister and leader of the Liberal Democrats Nick Clegg in taking a post at a leading tech company. Clegg was Meta’s president of global affairs until this year.
▸ Wall Street weakens as US government shutdown continues to hang over trading▸ French assets more stable after Macron promises to name prime minister▸ Gold prices surrender some ground after this year’s dizzying rallyGlobal equities edged lower yesterday as the US government shutdown continued to hang over financial markets.After reaching record highs on Wednesday, Wall Street stocks slipped back, with the blue-chip S&P 500 index down 0.3 per cent and the tech-heavy Nasdaq Composite falling 0.4 per cent by early afternoon trading in New York.Fund managers said the shutdown — which has delayed the publication of key US economic data — meant investors were holding off on making big bets ahead of third-quarter earnings season, which will provide an indication of the health of the world’s biggest economy.“Investors are suspended in animation with the US government shutdown and earnings season kicking off next week,” said Arun Sai, senior multi-asset strategist at Pictet Asset Management.Stock markets across the Atlantic also broadly weakened, with the region-wide Stoxx Europe 600 index falling 0.4 per cent.In Paris, markets were more stable after President Emmanuel Macron promised to name a new prime minister by today. The Cac 40 index edged 0.2 per cent lower.
Global stock markets are at risk of a sudden correction as the artificial intelligence boom pushes valuations towards dotcom-bubble levels, both the IMF and Bank of England have warned.Kristalina Georgieva, IMF managing director, yesterday said bullish market sentiment about “the productivityenhancing potential of AI” could “turn abruptly”, hitting the world economy.She was speaking hours after the BoE body overseeing financial stability risks also drew parallels with the 2000 crash that followed the dotcom boom, warning of the risk of a “sudden correction” in global financial markets.“Today’s valuations are heading towards levels we saw during the bullishness about the internet 25 years ago,” Georgieva said in a speech ahead of the IMF’s annual gathering next week.
▸ Global stocks hit record highs as traders back Wall Street’s AI-driven rally▸ US government bonds and the dollar both attract investor demand▸ Paris equities and French debt recover some losses from earlier in the weekGlobal stocks were trading at record highs yesterday, rebounding from a brief dip earlier in the week as investors continued to bet on Wall Street’s AI-driven rally.US stocks slipped on Tuesday after reports that tech giant Oracle was facing hurdles concerning its plans to buy and rent billions of Nvidia chips. The news unsettled investors, raising fears of an AI stock market bubble.But confidence returned to the market yesterday with Wall Street’s two main indices trading at record highs. The bluechip S&P 500 rose 0.5 per cent and the tech-heavy Nasdaq Composite was up 0.9 per cent by early afternoon in New York.
OpenAI has inked $1tn of agreements this year for computing power, raising big questions about how it can fund them. As it burns through cash, it has nowhere near the capital required. The deals often involve circular financing that binds big tech groups to its ability to turn a profit. ‘Part of Silicon Valley’s “fake it until you make it” ethos is to get people to have skin in the game. Now a lot of companies have a lot of skin in the game,’ one expert says.
▸ Investor nerves over bubble in artificial intelligence weigh on Wall Street▸ Dollar and Treasuries advance despite continuing US government shutdown▸ European stocks edge lower amid political crisis in FranceWall Street stocks slipped from record highs yesterday with technology stocks pulling the market lower as investor nerves about a bubble in artificial intelligence were tested again.Shares in Oracle — which have soared 65 per cent this year — fell as much as 7 per cent following reports that internal company data suggested challenges concerning its plans to buy billions of Nvidia chips and rent them out.The blue-chip S&P 500 index dropped 0.4 per cent while the tech-heavy Nasdaq Composite was down 0.6 per cent by early afternoon in New York after brief intraday record highs in early trading.In spite of a flurry of recent deals between big AI companies, some investors are increasingly concerned that US AI stocks exhibit characteristics reminiscent of the dotcom era bubble.
OpenAI has agreed to buy tens of billions of dollars’ worth of chips from AMD as part of a deal that could see the ChatGPT maker take a 10 per cent stake in the $270bn chipmaker over time.The US-based artificial intelligence start-up said it had agreed to purchase processors with a total power consumption of 6 gigawatts — roughly equivalent to Singapore’s average demand — sending the US-based chipmaker’s shares as much as 30 per cent higher yesterday.The companies did not put a total figure on the transaction, but OpenAI executives estimate that 1GW of capacity costs about $50bn to bring online, with two-thirds of that spent on chips and the infrastructure to support them.The deal comes just a fortnight after AMD rival Nvidia said that it planned to invest $100bn in OpenAI, with the two companies pledging to deploy 10GW of new data centre capacity.AMD has also issued OpenAI a warrant to purchase as many as 160mn shares at an exercise price of $0.01 over time based on AMD’s “achieving certain share price targets” and OpenAI deploying its chips. That would equate to about 10 per cent of the company.
▸ Landmark deal between OpenAI and chipmaker AMD buoys Wall Street▸ European stocks weighed by political turmoil in France as PM resigns▸ Tokyo equities soar to record highs as Takaichi elected leader of ruling partyA rally in global technology stocks carried Wall Street higher yesterday after a landmark deal between OpenAI and chipmaker AMD.OpenAI agreed to buy tens of billions of dollars’ worth of chips from AMD in order to accelerate the ChatGPT maker’s development of its new data centres to power its AI models.AMD’s share price rose as much as 37 per cent in early trading before paring some gains to stand up about 27 per cent.Other semiconductor names were buoyed by the deal with Super Micro Computing rising 5.4 per cent, Palantir up 4.5 per cent and Arm Holdings rising 4.2 per cent.Wall Street’s tech-heavy Nasdaq Composite index was up 0.6 per cent by early afternoon in New York. The bluechip S&P 500 index gained 0.4 per cent despite the ongoing government shutdown in the US.
Gold’s biggest rally since the 1970s is being stoked by “gold-plated Fomo”, as investors fearful of missing out on returns and worried about inflation add the precious metal to their portfolios.The bullion price has rocketed nearly 50 per cent this year to a record of more than $3,800 per troy ounce after US President Donald Trump’s trade war sparked a rush to haven assets and sent the dollar tumbling.But even when tariff-induced volatility in financial markets receded over the summer, the gold price accelerated, with a near-12 per cent jump in September alone marking the biggest monthly gain since 2011.A crucial catalyst, said asset managers, was the wider range of investors jumping on the bandwagon of soaring prices after years of record buying by central bank reserve managers.“It’s gold-plated Fomo,” said Luca Paolini, chief strategist at Pictet Asset Management, referring to a “fear of missing out” that has helped stoke huge gains in megacap technology stocks and other markets such as credit. “Gold has become so big . . . that you cannot ignore it. There becomes a level when it becomes impossible not to own it.”
The Bank of England yesterday quietly replaced a dataset linked to one of its most closely watched business surveys, adding to uncertainty about the quality of UK economic figures.According to data published by the BoE at 9.31am, businesses expected UK inflation for the year ahead to be 3.5 per cent, the highest since 2023.But the BoE then swapped the spreadsheet with the underlying results of its survey of chief financial officers on its website.The updated version showed the oneyear inflation expectation at 3.4 per cent, the same as the previous month.“The Bank of England succumbed to data reporting problems, changing the published results of their Decision Maker Panel after the numbers were posted . . . without issuing a correction or explaining what happened,” said Robert Wood, economist at consultancy Pantheon Macroeconomics.
▸ Semiconductor shares rally globally, lifting Seoul stocks to all-time high▸ Stoxx Europe 600 benchmark hits second consecutive record peak▸ Weak debt auction pushes Japanese bond yields to highest level since 2008A rally in chip shares carried European and South Korean equity indices to record highs yesterday.Semiconductor stocks climbed globally after SK Hynix and Samsung Electronics — the two biggest South Korean chipmakers — signed a letter of intent with OpenAI to supply the company’s $500bn data centre project, dubbed “Stargate”.Shares in SK Hynix and Samsung Electronics rose 9.9 per cent and 3.5 per cent, respectively.Sentiment towards the sector was also boosted by OpenAI completing a deal that values the company at $500bn, making it the world’s most valuable privately owned company.
Private employers in the US shed the largest number of jobs in two-and-ahalf years in September, according to unofficial data that investors are relying on because of the government shutdown.Private sector employment fell by 32,000 last month, payroll processing group ADP said, confounding economists’ expectations for an extra 50,000 roles and triggering a rally in Treasuries.The US government shut down for the first time in nearly seven years early yesterday, tipping Washington into one of the biggest political crises of President Donald Trump’s second term.The closure is expected to result in the furlough of around 750,000 workers and could cost the US economy billions of dollars’ worth of lost output after Republicans and Democrats failed to strike an agreement to fund the federal government into the new fiscal year.
▸ Pharmaceutical groups push Stoxx 600 and FTSE 100 to all-time peaks▸ Treasury bonds rally after weaker than expected US employment data▸ Wall Street indices mixed after clawing back losses from earlier in sessionEuropean and UK stocks jumped to fresh record highs yesterday, buoyed by pharmaceutical stocks after President Donald Trump announced a new directto-consumer drug sales programme.The US government’s agreement with Pfizer to lower drug prices and sell medicines directly to patients is expected to be replicated by other pharmaceutical companies.Washington said it was negotiating higher prices for drugs sold to G7 countries plus Switzerland and the Netherlands to counteract the lower US revenues for pharma companies.The pan-regional Stoxx Europe 600 index climbed 1.2 per cent while London’s FTSE 100 gained 1 per cent — with both indices closing at all-time highs.
Sir Keir Starmer has tried to revive his floundering premiership by urging his flag-waving Labour party to launch a “patriotic” fight against Nigel Farage’s Reform UK, declaring: “I don’t believe Britain is broken.”The prime minister used the threat of Farage as a rallying cry in his speech to the Labour conference, accusing the Reform leader of “stirring the pot of division” and wanting Britain to fail.Calling Farage “a snake oil salesman”, he stepped up his criticism of people seeking to sow “fear and discord across our country”.Starmer arrived in Liverpool with widespread discontent over his leadership, speculation that he could face a challenge after a round of elections next May and a calamitous -54 YouGov approval rating.In a crucial speech, Starmer pitched his message at his party’s working-class base, promising to cut immigration, feting industry and branding Labour “the patriotic party” as activists waved flags they had been given.
▸ Prospect of US government shutdown helps push Wall Street lower▸ European equity indices more upbeat, led higher by Frankfurt▸ Gold extends gains but crude oil retreats on supply glut fearsWall Street edged down yesterday as the chances ticked higher of a US government shutdown beginning at midnight.The tech-heavy Nasdaq Composite index was 0.2 per cent lower by early afternoon yesterday while the blue-chip S&P 500 was down 0.1 per cent.US vice-president JD Vance said on Monday afternoon that the government was “headed to a shutdown” after President Donald Trump and congressional leaders failed to strike a deal in a White House meeting.While government shutdowns do not have any consistent readthrough for financial markets, investors were mostly concerned that it would mean a suspension of Friday’s closely watched non-farm payrolls data release.The data has been taken as a key barometer of interest rate cut expectations in recent months.
Downing Street has opened the door for Labour to break its election promises and raise taxes in the Budget, as chancellor Rachel Reeves told critics in the party to stop peddling the “dangerous” idea that she can relax fiscal discipline.Darren Jones, the prime minister’s chief secretary, refused to rule out the possibility that Reeves would break Labour’s manifesto vow not to increase income tax, value added tax or national insurance rates. He told Sky News: “The manifesto stands today because decisions haven’t been taken yet.“I’m not ruling anything out and I’m not ruling anything in,” he added. “Today, the manifesto stands.”Earlier Reeves told a restive Labour conference in Liverpool to “have faith”, arguing that the only route to the party’s priorities and a strong economy was to maintain the confidence of the markets.While ministers often use their conference speech to address an audience outside the hall, Reeves’ message was aimed squarely at internal critics who believe she should relax her fiscal rules to boost spending.Sir Keir Starmer will today back his chancellor as he warns the party in his keynote speech to brace itself for decisions that are “not cost-free or easy”.
▸ Wall Street climbs as investors shrug off risk of US government shutdown▸ Dollar retreats against leading forex rivals but Treasuries attract buyers▸ European equity indices advance while pressure eases on UK gilt yieldsWall Street stocks rose yesterday as investors shrugged off the risk of a potential US government shutdown.President Donald Trump was set to meet lawmakers yesterday in an effort to break the budget deadlock behind the looming federal shutdown.Federal funding will expire today if no short-term funding agreement is reached, with a shutdown following tomorrow.“In the past, shutdowns have had a mixed impact on equities, rates and the dollar with no clear pattern,” said analysts from Goldman Sachs, noting that the dollar had weakened “in most instances”.In the clearest sign of investor concern, gold prices soared to another fresh record high, punching through the $3,800 a troy ounce mark.The tech sector carried stock markets higher with the Nasdaq Composite up 0.6 per cent by early afternoon in New York. The blue-chip S&P 500 index was up 0.2 per cent.
Investors have warned that an Andy Burnham-led Labour government would spark a sell-off in gilts and the pound if it launched a borrowing spree against a backdrop of fragile markets.Burnham, Labour mayor of Greater Manchester, said that the UK should not be “in hock” to bond markets, as he burnished his leftwing credentials in what is widely seen as a challenge to Prime Minister Sir Keir Starmer.But fund managers said Burnham’s proposal to borrow an extra £40bn to build council houses, alongside a mass nationalisation scheme, would alarm a gilt market already under pressure from the scale of government borrowing.Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management, said: “I think this speaks to his own financial naivety. Market confidence would sour very quickly. Yields would rise and the pound would also likely be under pressure.”Starmer responded yesterday by comparing Burnham’s economic policies to those of former Tory prime minister Liz Truss, whose economic plans also spooked the bond markets.
▸ Strong US economic data damps hopes for extended series of rate cuts from Fed▸ S&P 500 and Nasdaq trend lower while Treasury yields rise on robust figures▸ Gilt yields also rise after downbeat comments from BoE rate-setter on cutsUS stocks slipped and government bond yields rose yesterday after robust economic data cast doubt on investors' expectations for a series of interest rate cuts by the Federal Reserve.Revised figures for US second-quarter growth showed that the world's biggest economy grew more strongly than previously estimated, with GDP increasing at an annualised rate of 3.8 per cent in the three months to the end of June compared with an earlier estimate of 3.3 per cent.Consumer spending was also revised higher, growing at an annualised rate of 2.5 per cent from 1.6 per cent previously. In addition, the number of initial jobless claims data for the US was lower than analysts had expected.
Bond giant Pimco is betting on a fall in UK inflation that will, in turn, allow the Bank of England to cut interest rates further than traders currently expect, arguing that there is “nothing that special” about the price pressures affecting the country.The manager of $2tn in assets has an overweight position relative to the benchmark index in five-year gilts, which stand to benefit from more aggressive BoE rate cuts.“We don’t think the UK economy will prove to be a massive outlier [on inflation],” Andrew Balls, Pimco’s chief investment officer for global fixed income, told the Financial Times yesterday.Britain is on track for the highest rate of inflation among the G7 this year, according to the OECD. The Paris-based organisation said this week that consumer prices would rise 3.5 per cent in 2025, up from 2.5 per cent last year, and would remain well above the BoE’s 2 per cent target in 2026.
▸ European defence stocks surge after Trump’s remarks on Ukraine war▸ Wall Street lower on Powell signal that further rate cuts were not guaranteed▸ Dollar rallies but US government bonds sold by investorsEuropean defence stocks rose yesterday after President Donald Trump said that Ukraine could win back all of its territory that has been seized by Russia.Trump emphasised the need for support from Europe when he said on Tuesday that Ukraine should be able to return to its borders from before Russia's full-scale invasion in 2022.European defence names rose as investors bet on more sector spending. In Frankfurt, Hensoldt rose 8 per cent and Rheinmetall climbed 3.5 per cent. BAE Systems rose 2.2 per cent in London and Thales climbed 2.4 per cent in Paris.Defence stocks have been among the best performers in Europe this year, driving equity market returns as governments on the continent pledge higher defence spending.
Amazon Fresh grocery stores are closing in the UK after just four years, as the US tech giant’s attempt to revolutionise old-fashioned food shopping failed to win over enough customers.The ecommerce group said yesterday that it planned to close 14 of its Fresh stores, which use technology to track what customers are putting in their shopping baskets and dispense with the need for checkouts.Amazon plans to replace the final five Fresh stores with its Whole Foods Market brand, increasing the total number of these stores in the UK to a dozen by the end of next year.Amazon did not disclose when the Fresh closures would take place, with UK law mandating it undertake a consultation period with employees. All of its stores are in or around London.The decision to shut its Fresh stores comes as Amazon has struggled to mount a serious challenge against incumbent supermarkets such as Tesco and Sainsbury’s.
▸ US interest rate cut expectations push gold to another record high▸ Gilt yields fall as data shows UK private sector activity grows less than expected▸ Argentine peso gains before Trump talks with Milei over economic supportGold prices hit another record high yesterday as traders waited for a speech by the US Federal Reserve chair for clues about the central bank's next move.The price of bullion rose to as much as $3,790 a troy ounce before dropping back to about $3,775 later in the day.The precious metal has punched through a series of record high prices in recent weeks, fuelled by the expectation of interest rate cuts in the US.Investor nerves about inflation and ballooning public debt in the world's biggest economy — coupled with President Donald Trump's threats to the independence of the Fed — have also sparked concerns about the viability of dollar assets as a store of value.
Nvidia has announced plans to invest up to $100bn in OpenAI in return for a significant stake in the ChatGPT maker, as part of a joint effort to build data centres for artificial intelligence.OpenAI is planning to buy millions of Nvidia’s AI processors as part of a deal to deploy up to 10 gigawatts of capacity, the two tech groups said yesterday, the equivalent output of 10 nuclear reactors.Should Nvidia commit the full $100bn, it would be the largest-ever investment in a private company, reflecting the vast resources the $4.5tn chip giant wields as the world’s most valuable company. The contract will ensure that Nvidia stays at the heart of OpenAI’s products for years to come.The deal could generate hundreds of billions of dollars in revenue for Nvidia, whose shares rose about 4 per cent. But the groups did not specify a timeframe for the deployment and much of the details remain uncertain.
▸ Wall Street extends record-breaking streak despite visa fears for Big Tech▸ Treasury bonds experience modest selling as traders await Fed commentary▸ Dollar retreats against rivals and European stocks edge downwardsWall Street stocks extended a recordbreaking streak yesterday despite warnings that President Donald Trump's new visa rule change could hit big US technology companies.The president announced late on Friday that he planned to raise the application fee for a H-1B foreign worker visa to $100,000.Tech companies in Silicon Valley — whose surging share prices have carried US stock markets to new highs in recent years — have typically relied heavily on the visa to hire skilled engineers, scientists and coders from overseas.Wall Street's blue-chip S&P 500 index was up 0.1 per cent by lunchtime in New York while the tech-heavy Nasdaq Composite index had risen 0.2 per cent.
Sir Keir Starmer is exploring proposals to abolish some visa fees for top global talent at a time when the US has moved sharply in the other direction.The prime minister’s “global talent task force” is working on ideas to lure to the UK the world’s best scientists, academics and digital experts, as it seeks to stimulate economic growth.One option being considered is abolishing visa charges for the global elite, according to people briefed on the discussions inside Number 10 and the Treasury. “We’re talking about the sort of people who have attended the world’s top five universities or have won prestigious prizes,” said one official. “We’re kicking around the idea of cutting costs to zero.”The reforms were being discussed in Number 10 and the Treasury before the Trump administration announced last week it would increase to $100,000 the application fee for an H-1B visa, which is relied on by US tech groups.
