October 20 Global Financial Morning Briefing: U.S. tech stocks rebound while Japanese and South Korean markets fall, amid expanding AI investment, energy transport risks, and rate-hike expectations.

Key takeaway:
Today, watch whether AI investment can continue to translate into orders and demand for applications. Also monitor how energy transport risks, rate-hike expectations, and domestic policy signals affect market divergence.
【Today's Key Themes】
First theme: Global tech stocks are diverging. U.S. tech stocks rebounded, while Japanese and South Korean markets fell in early trading. Developments in the memory industry should be assessed in light of actual performance across different markets.
Second theme: AI investment and applications are advancing in tandem. Large cloud computing deals, computing-power service agreements, optical communications orders, and lower model costs offer clues for tracking the industry. Focus on contract execution and the realization of demand.
Third key theme: International oil prices closed mixed. WTI crude rose 2.22%, while Brent crude fell 0.28%; it would be inaccurate to characterize oil prices as moving uniformly in one direction.
Fourth key theme: Inflation and rate-hike expectations are constraining markets. A stronger dollar and the market’s continued pricing in a relatively high probability of a Fed rate hike this year mean that precious metals, bonds, and technology stock valuations are exposed to interest-rate shifts.
Fifth key theme: Domestic policy initiatives and capital flows are evolving in parallel. Liquidity tools, technology finance, and capital market reforms continue to advance. Today, watch the LPR announcement and the NDRC press conference, and monitor market performance following the decline in margin financing balances.
[U.S. stocks]
U.S. stocks closed mixed on Monday, with technology shares performing relatively well. The Nasdaq Composite rose 1.11% to 26,430.89; the S&P 500 gained 0.41% to 7,690.79; and the Dow Jones Industrial Average fell 0.07% to 51,966.87.
Among individual stocks, Amazon rose nearly 5%, Tesla gained 3.7%, and Micron Technology climbed nearly 3%. The Nasdaq Golden Dragon China Index fell 0.26%, while iQIYI dropped more than 2%.
Major European stock indexes broadly declined. Germany’s DAX fell 1.18%, the UK’s FTSE 100 dropped 1.08%, France’s CAC 40 slipped 1.11%, and the EURO STOXX 50 fell 0.92%.
[Macro]
The U.S. Dollar Index rose 0.14% on Monday, closing at 101.980 in late New York trading. The dollar rose to 158.52 yen, while the euro fell to $1.1212 and the pound fell to $1.3305.
According to CME FedWatch, the probability of rates remaining unchanged in October is 82.8%, while the probability of a 25-basis-point hike is 17.2%. By December, the probabilities of rates remaining unchanged, cumulative hikes of 25 basis points, and cumulative hikes of 50 basis points are 6.4%, 77.8%, and 15.8%, respectively.
The winning yields at the U.S. three-month and six-month Treasury bill auctions were 4.095% and 4.22%, respectively, both slightly higher than at the previous auctions. Bid-to-cover ratios rose to 2.77 and 2.84, respectively. France’s 10-year government bond yield rose 16 basis points intraday to 4.94%.
A Bank of Canada survey found that businesses’ five-year inflation expectations rose from 3.39% to 3.91%, with more than half expecting to pass on costs through price increases. Analysts are divided on whether the Bank of Canada will raise rates next week: Citi expects it to hold off, while BMO, Scotiabank, and RBC Capital Markets expect a hike.
In industrial metals, Goldman Sachs raised its end-2026 copper price forecast from $13,735 to $14,700 per tonne and its 2027 average copper price forecast from $13,800 to $15,400 per tonne. It also expects a copper supply deficit of around 950,000 tonnes outside the U.S. in 2026.
CME Group announced plans to launch tungsten futures.
In agricultural products, 64% of the U.S. soybean crop has been harvested, below the market expectation of 66%. Brazil’s new-season soybean planting progress stands at 26%, ahead of 24% at the same time last year.
[AI memory supply chain]
Memory stocks showed mixed performance across markets. SK Hynix’s U.S.-listed shares closed up 4.6% on Monday, while Micron Technology gained nearly 3%. In Asian trading on Tuesday, SK Hynix fell as much as 4.6% in South Korea, and Samsung Electronics dropped around 2%.
Investment in AI infrastructure continues to expand. According to people familiar with the matter, Nscale is in talks with Anthropic on a cloud computing deal worth $45 billion, which could be finalized as soon as the next few days. A subsidiary of Xtron Data signed a computing cloud services agreement worth up to 37.49 billion yuan.
Demand for optical communications is flowing through to upstream components. A Nanchang, Jiangxi-based optical components company reported that revenue from its communications optics business grew 118.25% in the first half of the year, with orders for high-speed optical module components booked through the end of 2027. There are also reports that Samsung Electronics plans to make a full-scale entry into silicon photonics in 2027.
A-share areas to watch: memory, optical modules and components, computing services, domestic chips, and supernodes. Monitor order conversion, delivery progress, and returns on investment.
[Technology industry]
According to people familiar with the matter, OpenAI is accelerating efforts to raise around $30 billion and is in talks with investors including SoftBank and MGX. Its potential valuation could exceed $1.4 trillion. Fundraising and computing investment by frontier AI companies continue to expand.
Domestic AI models continue to be updated. MiniMax launched M3.1 Flash, claiming a threefold increase in speed and a 70% price reduction. DeepSeek updated V4.1 Flash, keeping API prices unchanged and opening up search and crawling interfaces. Enterprise AI applications, inference services, and supporting tools are areas to watch.
Nvidia used 8,192 GPUs on Germany’s JUPITER supercomputer to simulate a fault-tolerant quantum computing system with 104 qubits and validate its “magic state cultivation” technology. The company says this technology could reduce the number of physical qubits required by around 90%, but practical applications still face technical challenges.
Apple confirmed that it will hold a product launch event at 1 p.m. Eastern Time on October 28. According to technology journalist Mark Gurman, expected products include the first touchscreen MacBook Pro, new Macs powered by the M6 chip, and an iPad mini with an OLED display.
Reports say Waymo plans to use $5 billion in recently borrowed funds to expand its fleet from around 4,000 vehicles to 8,000 by the end of this year, and to 20,000 by the end of next year.
In China, Huawei’s Intelligent Automotive Solution business and CATL are partnering on battery swapping, while Alibaba’s DAMO Academy launched the automotive-grade enhanced Xuantie E908A processor. Nine government departments called for accelerating the commercialization of technologies such as brain-computer interfaces and embodied intelligence.
Intel has applied for an exemption from U.S. restrictions on foreign-made advanced robots, saying that some automated guided vehicles used in semiconductor factories do not yet have validated U.S.-made substitutes. Disruptions to equipment operations could affect its U.S. manufacturing capacity.
[Crude oil]
International oil prices closed mixed. November-delivery WTI crude futures rose 2.22% to $103.66 a barrel, while December-delivery Brent crude futures fell 0.28% to $109.55 a barrel. The domestic SC crude oil front-month contract rose 2.34% in overnight trading to 736 yuan a barrel.
[Precious metals]
Gold came under pressure overnight, with spot gold briefly falling below $4,140 an ounce, down 0.58% on the day at the time. Gold T+D on the Shanghai Gold Exchange fell 0.67% in evening trading to 892.9 yuan per gram, while Silver T+D fell 0.42% to 13,872 yuan per kilogram.
In domestic futures overnight trading, the most-active Shanghai gold contract fell 0.69% to 895 yuan per gram, while the most-active Shanghai silver contract fell 0.28% to 13,917 yuan per kilogram.
Holdings in SPDR Gold Trust, the world’s largest gold ETF, fell by 0.57 tonnes from the previous day to 1,058.472 tonnes.
[Domestic developments]
China’s GDP grew 4.6% year on year in the first three quarters. PBOC Governor Pan Gongsheng said the central bank will study the possibility of switching the tenor of its main open-market operations to overnight at an appropriate time. It will also advance measures such as establishing liquidity support facilities to address large redemptions by non-bank institutions and expanding the range of institutions eligible for the Standing Lending Facility.
The PBOC and other departments issued financial guidelines to support the development of international science and technology innovation centers in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area. The State Administration of Foreign Exchange plans to introduce additional measures to support businesses participating in international markets.
The China Securities Regulatory Commission issued the Rules for the Implementation of Administrative Penalties in Cases of Illegal Securities Transfers, sought public comment on the Guidelines on Advance Compensation in the Securities Market, and said it will soon introduce four measures to improve rules on penalties for illegal share reductions. The Ministry of Commerce and other departments announced a decision to optimize and adjust export controls on drone-related items.
A-shares were mixed on Monday: the Shanghai Composite Index rose 0.39% to 3,730.92; the Shenzhen Component Index gained 0.13%; the CSI 300 rose 0.09%; the ChiNext Index fell 0.94%; and the STAR 50 Index dropped 2.17%.
As of October 19, the combined margin financing balance on the Shanghai and Shenzhen exchanges stood at 2,445.496 billion yuan, down 6.26 billion yuan from the previous trading day. The balance rose by 798 million yuan on the Shanghai Stock Exchange and fell by 7.058 billion yuan on the Shenzhen Stock Exchange. A 65 billion yuan, seven-day reverse repo matures today.
Most commodities fell in overnight trading. Ethylene glycol dropped nearly 4%, while synthetic rubber, coking coal, and liquefied petroleum gas fell more than 2%. The most-active January 2027 live hog futures contract fell 2.48% on Monday, closing near 10,000 yuan per tonne. The national average live hog price dropped below 10 yuan per kilogram. Supply from producers and adjustments to production capacity warrant continued attention.
[Key events]
09:00 China announces its one-year Loan Prime Rate (LPR).
10:00 The National Development and Reform Commission holds its October press conference.
14:00 Germany’s September PPI month over month and Switzerland’s September trade balance; the UK’s three-month ILO unemployment rate for August, September unemployment rate, and September claimant count.
16:00 Eurozone current account, seasonally adjusted, for August.
17:00 Germany and the eurozone release their October ZEW Economic Sentiment Index.
20:15 Weekly change in U.S. ADP employment for the week ended October 3.
20:30 U.S. annualized housing starts and total building permits for September.
22:00 U.S. pending home sales index month over month for September.
[Risk factors]
Disruptions to energy transport could push up oil prices and logistics costs, while a renewed rise in inflation could strengthen expectations of rate hikes. AI financing, deal discussions, and product plans remain uncertain; delivery of industry orders and returns on capital expenditure require continued validation. Early-session movements in Japanese and South Korean equities may continue to change during the trading day.
A-share-related content in this article is for observation purposes only and does not constitute investment advice.
For research and educational purposes only. Not investment advice.
#财经晨报 #全球市场 #A股 #AI #Technology industry
For research and educational purposes only. Not investment advice.