AI trade rebounds, midterms awaited

AI trade rebounded on Tuesday as investors digested strong US economic data and awaited US midterm election results. Heavyweight tech stocks led the S&P 500 and Nasdaq higher, while sectors like tech rose 1.3% and materials fell 2%. Microsoft, Nvidia, and Amazon were among the biggest gainers, while Walmart and Home Depot were among the biggest decliners.

China took steps to slow the yuan's appreciation against the US dollar, raising the foreign exchange reserve requirement ratio. This move followed a 13-day streak of yuan gains and came after US President Trump unveiled tariffs in April. Meanwhile, US yields rose as much as 7 basis points at the long end, steepening the yield curve.

The mixed economic data included a sharp rise in job openings in September and a fall in layoffs, indicating a solid labor market. However, non-farm payroll gains barely grew, and business demand for credit contracted for the first time in over a year. Brazil's central bank decided to hold its Selic rate at 13.75%, amid a selloff in Brazilian markets following President Lula's reelection victory.