Global stocks rise on AI optimism, lower oil helps bonds

Global stocks experienced a rise on Monday as optimism surrounding artificial intelligence (AI) lifted tech shares and a drop in oil prices boosted bond markets. The Nasdaq futures index increased nearly 1%, driven by a rally in chipmaker shares, with Intel leading gains at 5.4%. Micron and AMD also saw gains of around 2%. South Korean data indicated that exports in the first 20 days of the month reached a record high, attributed to a surge in chip demand.

The bond market saw a rally, with European debt leading gains, following a series of weekly sell-offs in response to rising interest rates and high oil prices last week. The MSCI's All-World index rose by 0.3%, while European shares surged by 0.75%. S&P futures gained 0.6%.

Some investor concerns about potential interest rate hikes by global central banks subsided as oil prices decreased towards $100 a barrel from previous highs above $109. The AI demand was cited as the reason for the tech stock bounce back, highlighting the ongoing themes of AI and oil prices.

Geopolitical factors also played a role, with US President Donald Trump attending the United Nations General Assembly and US-Iran tensions escalating. Meanwhile, Saudi Arabia's oil production recovered, with exports nearing 4 million barrels per day in September, after reaching a low of 2.4 million bpd in August.

Commodities analyst Vivek Dhar estimated that oil market inventories would deplete within 5 to 10 weeks, compared to previous estimates of 15 to 20 weeks. This led to an expectation of further rate hikes by major central banks, with the Federal Reserve facing a 56% chance of raising rates again in October. Bond markets suffered due to the drop in oil prices, with 10-year yields nearing their highest level since 2008 at around 4.2%.

French debt experienced the highest risk premium since the 2012 Eurozone debt crisis, while German 10-year yields dropped by 5 basis points to 3.472%.