South Korean chipmakers rallied in the early hours of the new week following Nvidia’s announcement last Friday that it will sell 260,000 chips to several South Korean companies and to the South Korean government. Nvidia also gained 2% yesterday.

Then, Amazon jumped 5% to a fresh all-time high on an at least $38 billion deal with OpenAI, giving the latter access to hundreds of Nvidia chips as part of a seven-year partnership. As such, Amazon became the latest company to seal a deal with OpenAI — which has been announcing fresh partnerships with sector giants in recent weeks to secure as much computing power as it can, from wherever it can. Each announcement has offered these companies — and their investors — a moment of glory. So far, OpenAI has announced deals with, on top of Microsoft, Oracle, Google, AMD, CoreWeave, Broadcom, and now Amazon.

Meanwhile, Microsoft announced a deal with the Australian firm IREN — formerly a crypto mining company — which upgraded its data center to rent out capacity to insatiable Big Tech companies. IREN jumped more than 11% on the Nasdaq. Another one of these mining companies, Cypher Mining, also jumped 16% after announcing a $5 billion deal with Amazon.

In summary, tech stocks had a strong Monday session following these announcements, even though some skeptics continued to raise their eyebrows, concerned by the circularity of these deals.

European carmakers were another bright pocket of the market yesterday as China signaled it would ease the export ban on Nexperia chips, following tensions sparked last month by the Dutch government’s takeover of Nexperia from its Chinese owner over governance and security concerns — a move that triggered fresh diplomatic tensions between the two blocs. China’s decision to block exports of finished chips to European carmakers had disrupted key supply chains. The easing of these restrictions triggered a relief rally across European carmakers, pushing Volkswagen up around 2.3%. Renault, Mercedes, and Stellantis also gained.

Gains in Europe were also on the menu for Rheinmetall, ASML, and the big banks — making the move quite broad-based. That was not the case in the US, where a set of weak ISM data prevented the S&P 500 from extending gains beyond tech. In fact, 300 companies in the S&P 500 fell yesterday, and the S&P 500 equal-weight index closed 0.24% lower on worries that US economic activity may be weakening — without a clear guarantee that the Federal Reserve (Fed) will cut rates again in December.

Indeed, the probability of another 25 bp Fed cut in December has now eased to 65% from above 90% last week, and Chicago Fed’s Austan Goolsbee rubbed salt in the wound by saying he’s more concerned about inflation than jobs right now. Even though other Fed members sounded more dovish, the US 2-year yield — which reflects Fed rate expectations — rose yesterday, hinting that the doves lost further ground despite soft data and the US shutdown, which should further weigh on US growth expectations.

Higher yields helped the US dollar extend gains against major peers — exactly the opposite of what was expected during a government shutdown. And this shutdown is not a short one; on the contrary, it’s on track to become the longest in US history.

But here we are. Major US indices are holding their ground, even though tech continues to do the heavy lifting — and bubble and circularity concerns keep bubbling. Yields are higher than last week but still near their lowest levels since the April dip, and the US dollar is recovering. Market volatility remains contained, and earnings are coming in better than expected.

Meanwhile, Big Tech bond issuance is drawing exceptionally strong demand on both sides of the Atlantic — we’re talking five to ten times oversubscription for names like Oracle, Google, and Meta — as investors look for AI exposure through a different, and arguably less risky, instrument.

So what could go wrong? Many analysts bet that the rally in major global indices will continue on the back of insatiable AI appetite, robust earnings and easing trade tensions. Plus, November and December tend to be good months for stock investors. If all goes well, the year could end without another April-like sharp selloff across global financial markets.

But it’s worth remembering that the buzzy AI headlines continue to mask a deteriorating reality: if you take tech out, the rest is not necessarily sweet. Even within tech, valuations are extremely high, and the urge to see ROI is growing.

Bank of America, for example, predicts that AI capex will reach 94% of operating cash flow in 2026, up from 76% in 2024 — a reason why these companies are now issuing debt. High valuations combined with falling cash flow mean that investors will grow pickier about returns — and the latest market reactions offer a warning: Palantir became the third major tech company — after Microsoft and Meta — to fall despite announcing record, better-than-expected results.

And if tech sneezes, global financial markets — starting with the US — will catch a cold.

On the macro front, despite the lack of fresh official data, private indicators suggest a slowing economy and a weakening labour market. US layoffs have already reached their highest level since 2020. Inflationary risks persist due to tariffs, the geopolitical and trade setup remains unstable, and developed-market politics — and budget discussions — aren’t looking good either.

Today, major US and European indices are in the red. But there are no particularly worrying signs of stress. We continue to watch earnings: AMD, Shopify and Uber are among companies that could impact sentiment.