FISG Daily Market Wrap 19th October

AI Rebound Lifts US Futures as China Growth Outlook Improves

US equity futures rebounded on Monday following last week’s technology sell-off, with Nasdaq 100 futures rising 1.3% and S&P 500 futures gaining 0.8% as investors looked ahead to major corporate earnings for signals on the sustainability of the AI rally. The recovery followed a prolonged decline in semiconductor stocks, with a closely watched chip index recording its longest losing streak since 2008. Asian equities remained under pressure, while market volatility recorded its biggest jump since June. US Treasuries advanced as investors sought safer assets amid uncertainty over technology valuations and broader market risks. The Dollar’s performance was mixed, while the Euro weakened against most major currencies. Bitcoin climbed more than 2%, trading above $82,000. In Europe, equity futures weakened amid widespread protests in France, while French government bond futures also declined as political and social tensions weighed on sentiment. Oil prices retreated from a five-month high, with Brent crude falling 1.8% to $107.90 a barrel. Traders weighed renewed hostilities in the Middle East against signs that regional oil supplies remained close to pre-conflict levels. Persistent instability across the Persian Gulf continues to pose risks to energy markets, inflation and the global interest-rate outlook. In China, economic growth accelerated more than expected in the third quarter, strengthening the prospect of Beijing meeting its annual growth target. Goldman Sachs and Barclays raised their forecasts for China's 2026 GDP growth to 4.6%, while Nomura expects growth of 4.8% in the fourth quarter and 4.7% for 2026. Stronger growth expectations could reduce the need for additional policy easing, although investors will continue monitoring domestic demand and the broader economic recovery. Elsewhere, French President Emmanuel Macron called for order to be restored following widespread violence over the weekend and declined to accept Interior Minister Laurent Nuñez's resignation, according to reports. In Australia, the Reserve Bank warned that labour-market conditions were softening faster than expected, highlighting the challenge of controlling inflation without undermining employment. Meanwhile, Japanese Prime Minister Sanae Takaichi rejected claims that her policies were responsible for the weak Yen and elevated interest rates. Markets now turn to upcoming corporate earnings and further economic data to assess whether the rebound in technology stocks can gain momentum. With AI valuations, Chinese growth prospects and geopolitical risks continuing to shape sentiment, investors remain cautious about the sustainability of the recovery. 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