Morning Bid: As oil swoons, AI recharges

As oil prices retreated, the excitement surrounding Meta's new AI assistant Muse and other tech advancements helped lift stocks at the start of the week, with Meta's share price jumping over 11%. The broader AI sector, which had been fluctuating due to dystopian warnings, also benefited from the rally. Global chip stocks, including US chipmaker AMD, which reached a $1 trillion market valuation, experienced a surge.

Asia's tech stocks followed suit, marking a record 20-day performance. The AI-related stock rally and chip sector gains came as a response to the mixed messages about AI's potential risks and benefits, with Meta's Muse announcement reigniting optimism. The upcoming summit between President Trump and China's Xi Jinping is expected to focus on AI risks, as well as potential trade truce extensions and geopolitical concerns like Taiwan and the Iran conflict.

Meanwhile, reduced crude prices also contributed to the market's positive sentiment, with Brent crude falling below $100 per barrel after Iran's offer to reopen the Strait of Hormuz. However, geopolitical tensions and economic concerns, particularly in Europe, remained on the radar, with French bond yields spiking and Fed speakers hinting at hawkish monetary policy.