FISG Daily Market Wrap 21th October

Tech Earnings Revive AI Optimism as Oil Tops $110

Global equities advanced on Wednesday as strong technology earnings helped restore confidence in the AI trade following last week’s sell-off. MSCI’s Asia Pacific Index rose 0.9%, ending a two-day decline, while South Korea’s Kospi gained 2.6% and Taiwan’s Taiex advanced 0.9%. Nasdaq 100 futures climbed 0.7%, with European shares also positioned for a stronger open. SpaceX gained 8.1% in extended trading and Super Micro Computer surged 16% following better-than-expected results, supporting renewed optimism around AI-related demand. However, the outlook for AI infrastructure remained mixed. Etix surged 30% in Seoul as it rebounded from one of South Korea’s weakest IPO debuts, while Australia’s NextDC plunged 40% after lowering its outlook. US President Donald Trump also said that new and large data centres would be required to generate their own electricity and supply any excess power to local communities or the grid, highlighting growing concerns over the sector’s energy requirements.Oil prices continued to rise as attacks on vessels near the Strait of Hormuz threatened energy shipments. Brent crude climbed above $110 a barrel, supported by supply concerns and US industry data indicating another decline in crude inventories. The latest developments have reinforced concerns over disruptions to energy flows through the Persian Gulf and the potential implications for global inflation. In the UK, annual CPI inflation accelerated to 3.5%, exceeding the 3.4% forecast and rising from 3.1% previously. In Australia, Reserve Bank Assistant Governor Hauser highlighted the risk that higher technology and AI-related prices, alongside growing data-centre construction and domestic capacity pressures, could add to inflation and influence the outlook for interest rates ahead of the November policy meeting. Meanwhile, Treasuries edged lower, with the US 10-year yield rising 1 basis point to 5.12%, while the Dollar strengthened modestly against most G10 currencies. Gold traded near $4,115 an ounce after losing more than 1% since the start of the week. Elsewhere, reports indicated that the first Russian diesel cargo destined for the US is scheduled to ship on October 22. China’s central bank may also be preparing a gradual transition towards an overnight policy rate, while President Trump said the US and India were close to finalising a trade agreement after more than a year of negotiations. Markets remain focused on corporate earnings and the sustainability of AI investment, while rising energy prices and persistent inflation pressures continue to complicate the global interest-rate outlook. FISG Daily Market Wrap provides a concise view of the forces moving global markets, helping investors stay informed and better prepared for what comes next. FISG — Interstellar Group