AI Optimism and Easing Oil Risks Fuel Global Stock Rally
Global stocks rose on Tuesday as AI optimism returned and Middle East oil supply risks eased. The MSCI global equity benchmark gained as investors responded to a sharp rebound in technology shares, with Meta Platforms' Muse AI assistant being a key driver of the rally.
The recent surge in enthusiasm around AI was reinforced by the strong market response to Meta's Muse AI assistant, which was launched two weeks ago. Meta shares jumped more than 11% on Monday, their biggest one-day gain since April 2024, helping revive demand for companies exposed to the AI investment cycle.
AMD reached a $1 trillion market value, while Intel and Arm Holdings gained 12.2% and 17%, respectively. European semiconductor stocks continued to benefit from the renewed optimism, with the STOXX 600 rising 0.5% on Tuesday after gaining 1% in the previous session.
The improvement in oil markets provided support for bonds as well, with the benchmark U.S. 10-year Treasury yield falling three basis points to 4.93%. The decline in crude prices followed two developments that raised hopes of improved supply: a senior Iranian official said Tehran could reopen the Strait of Hormuz within seven days if the United States eased military pressure and lifted its blockade on Iranian ports.