[Before the market], AI boom drives index highs and interest rate cuts are mutually supportive, but valuation doubts are heating up (2025.10.09)

AI momentum continues to lead the overall buying trend, and the market is torn between loose expectations and valuation risks

The sentiment in early trading in Taiwan time on Thursday continued to be strong in technology. After the S & P 500 and Nasdaq hit intraday and close all-time highs on the previous trading day, the key variables are still concentrated on AI-driven capital momentum and the expectation of a cycle of interest rate cuts by the RSC. However, discussions on whether valuations are reasonable have heated up, the tension between short-term risk appetite and fundamental verification has intensified, and the pre-market mentality has become cautious and optimistic.

The Fed's signal is loose, and the meeting minutes tend to cut interest rates twice before the end of 2025.

Minutes of the September meeting released early Thursday morning in Taiwan time showed that most officials tend to cut interest rates one step further by the end of 2025, but there are still differences on the number and timing of interest rate cuts. Investors 'confidence in the loose environment has driven risky assets to continue to strengthen, and the market's debate over the trajectory of short-term interest rates takes a back seat, with the main axis returning to the corporate profits and AI capital expenditure cycle. Even if the issue of the U.S. government shutdown continues, the reaction of risky assets is relatively calm.

Technology rights continue to carry the market, and S & P and Nasdaq return to historical highs

Information technology, utilities and industrial stocks pushed the index higher, while funds remained focused on large technology and AI supply chains. The previous trading day, the S & P 500 and the Nasdaq index both hit record highs, indicating that trend funds have not yet loosened. Even though the short-term was disturbed by fluctuations in individual equity stocks, the overall long structure has not been destroyed.

Valuation risks rise, and the Bank of England names AI companies for high premiums

The Bank of England warned that stock market valuations seem to be high, particularly pointing out the premium level of AI-related companies, reminding that once optimistic expectations about the impact of AI cool down, stock market exposure may increase. This is in line with the market's pricing of AI's long-term productivity dividends. Investment sentiment is still affected by news and funds in the short term.

Geophysical risk mitigation signal, Israeli-Palestinian phase 1 plan boosts risk appetite

Trump said Israel and Hamas have agreed to the "first phase" of their peace plan, which includes the release of all hostages and the withdrawal of Israeli troops to the agreed line. Although details and implementation remain to be seen, signs of potential cooling provide support for market sentiment, and safe-haven demand is waiting and on simultaneously.

Asian stock markets are divided, SoftBank's surge and regional themes intertwined affect risk sentiment

Asia's intraday performance was mixed. Japan's Softbank Group announced that it would acquire ABB's robotics business for approximately US$5.4 billion, highlighting the continued extension of the AI and automation investment chain. Funds in the region still have strong support for growth themes, but the overall volatility is high, and the investment pace is still influenced by global interest rates and technology cycles.

Hong Kong's financial themes are heating up, HSBC's promotion of the privatization of Hang Seng Bank attracts attention

HSBC announced the launch of the privatization plan of Hang Seng Bank, valued at more than HK$290 billion, driving Hang Seng Bank's share price to rise sharply and boosting financial themes related to Hong Kong stocks. Regional financial structure adjustments may affect capital flows and valuation anchors, forming a short-term catalyst for the evaluation of Greater China financial stocks.

Gold innovation attracts funds, and risk avoidance and inflation hedging demand coexist

Gold prices continue to hover high. On the one hand, the market seeks to hedge against potential macro and geopolitical uncertainties, and on the other hand, it also reflects expectations for the future real interest rate path. Although some institutions view gold prices more, the short-term still depends on the trend of the US dollar and changes in real yield rates, and funds are dispersed between growth and defensive assets.

Chip competition heats up, and Huida comments on the cooperation arrangement between Ultramicro and OpenAI triggers discussion

Nvidia CEO Huang Renxun talked about the multi-billion-dollar cooperation between Advanced Micro Devices(AMD) and OpenAI, and expressed surprise at the arrangement of AMD to exchange about 10% equity for cooperation, calling it a smart but rare approach. This statement once again brought the focus back to the competitive landscape between AI hardware and ecosystems, and the market continues to evaluate the bargaining power and long-term payback period of the supply chain.

Financial reports and corporate dynamics affect the rhythm, and Oracle fluctuations highlight the sensitivity of growth stocks

The previous trend of Oracle(Oracle, ORCL) once interrupted the continuous rise of the S & P, reflecting the market's high sensitivity to the pace of cloud and AI transformation. Although the market subsequently recovered strongly and reached a higher level, individual stocks still had a large impact on the index, and investors continued to pay attention to the speed at which corporate capital expenditures and AI-related revenue were converted.

Futures and pre-market trading are on the sidelines, and wait for further verification of fundamentals after reaching highs

After the index hit a high, the pre-market trading atmosphere became more cautious, and the market's focus returned to fundamentals and subsequent data verification. In terms of funds, differences between growth and value styles still exist, and short-term fluctuations may be amplified by the news of a single large equity stock. Demand for risk management and hedging is heating up relatively in the high-end range.

Today's focus is whether AI endurance and interest rate cuts can form a positive resonance

Overall, AI themes are still the core driving force for U.S. stocks at this stage. The Fed's loose signal provides valuation support, but external noise from regulation and valuation cannot be ignored. The market will subsequently focus on whether the company's actual profits and cash flow keep up with capital expenditures and story imagination. AI promises need to continue to be fulfilled in financial reports and guidance to consolidate high-end evaluations.