By Caroline Valetkevitch
NEW YORK (Reuters) -Major stock indexes edged higher on Monday, with technology shares getting a boost after news that AMD signed an AI chip-supply deal with OpenAI, while the Japanese yen and euro weakened against the dollar after Japan’s ruling party elected a new leader and France’s new government quit.
Bitcoin stayed near its record high on Monday, with investors increasingly turning to alternative assets as a store of value as the U.S. government shutdown kept investors uncertain. The cryptocurrency was last up 1.61% at $124,755.87.
The euro was down 0.2% at $1.1717. New French Prime Minister Sebastien Lecornu resigned on Monday, barely 14 hours after appointing his cabinet.
The yen also declined after Japan’s ruling party picked conservative Sanae Takaichi, putting her on course to become the nation’s first female prime minister. She is an advocate of late premier Shinzo Abe’s “Abenomics” strategy to boost the economy with aggressive spending and easy monetary policy.
On Wall Street, the S&P 500 and Nasdaq rose while the Dow was slightly lower, as the U.S. federal government shutdown, which began last week, dragged on. The S&P 500 finished last week at a record closing high.
“The market is extending its momentum bias. It’s shrugging off the (U.S.) government shutdown and, because of that, there’s a belief that perhaps the Fed is going to be more generous than the market previously expected,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The Federal Reserve is widely expected to cut rates again by 25 basis points at its October 28-29 meeting, following data that shows a weakening labor market. In addition, Cardillo said, “we’re not far away from third-quarter earnings, and it looks as though it’ll be another good earnings season.”
Shares of AMD were up more than 28% and other chip companies’ stocks also rose amid optimism around artificial intelligence deals.
The Dow Jones Industrial Average fell 76.88 points, or 0.17%, to 46,681.40, the S&P 500 rose 18.94 points, or 0.28%, to 6,734.64 and the Nasdaq Composite rose 113.40 points, or 0.50%, to 22,893.90.
MSCI’s gauge of stocks across the globe rose 2.57 points, or 0.26%, to 995.78. The pan-European STOXX 600 index rose 0.02%.
French political instability has ramped up since Emmanuel Macron’s re-election in 2022, with no party or grouping holding a parliamentary majority.
“The bigger concern for the market is really what comes next, because if Macron decides to appoint another prime minister that’s going to be the sixth PM in two years,” said Michael Brown, senior research strategist at Pepperstone.
Any newcomer would face the same challenging parliamentary arithmetic and problems when trying to pass the budget, said Brown.
In Japan, the Nikkei soared above 48,000 for the first time after Takaichi beat the more moderate Shinjiro Koizumi in the Liberal Democratic Party’s leadership vote.
Short-dated Japanese government bond yields slid to a two-week low as traders pared bets on when the Bank of Japan will resume raising interest rates.
Most other major share markets around the region were closed for holidays, including mainland China, South Korea and Taiwan.
Gold surged to an all-time high above $3,900 per ounce, helped in part by the economic and political uncertainty in the U.S., France and Japan. Spot gold rose 1.83% to $3,957.25 an ounce.
U.S. crude rose 1.3% to $61.67 a barrel and Brent rose to $65.47 per barrel, up 1.46% on the day.
(Additional reporting by Kevin Buckland in Tokyo and Lucy Raitano in London; editing by Alison Williams and Nick Zieminski)
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