OpenAI and chip-designer Advanced Micro Devices announced a multibillion-dollar partnership to collaborate on AI data centers that will run on AMD processors, one of the most direct challenges yet to industry leader Nvidia. Under the terms of the deal, OpenAI committed to purchasing 6 gigawatts worth of AMD’s chips, starting with the MI450 chip next year. The ChatGPT maker will buy the chips either directly or through its cloud computing partners. AMD chief Lisa Su said in an interview Sunday that the deal would result in tens of billions of dollars in new revenue for the chip company over the next half-decade. The two companies didn’t disclose the plan’s expected overall cost, but AMD said it costs tens of billions of dollars per gigawatt of computing capacity. OpenAI will receive warrants for up to 160 million AMD shares, roughly 10% of the chip company, at 1 cent per share, awarded in phases, if OpenAI hits certain milestones for deployment. AMD’s stock price also has to increase for the warrants to be exercised.

After swinging between gains and losses till around noon, the Swiss market gained in strength as the session progressed on Monday and eventually settled modestly higher. The benchmark SMI closed up by 44.19 points or 0.35% at 12,551.36. VAT Group rallied 5.43%. Sandoz Group and Swiss Re gained 3.65% and 3.16%, respectively. Swiss Life Holding, Galderma Group, Logitech International, Sonova and Zurich Insurance gained 1 to 1.6%. Richemont ended 1.86% down. Swatch Group closed lower by about 1.2%. Schindler Ps, Sika and Givaudan lost 0.4 to 0.7%. Data from the State for Economic Affairs, or SECO, said Switzerland's unemployment rate held steady in September after rising slightly in the previous month. The unadjusted unemployment rate stood at 2.8% in September, the same as in August. In the corresponding month last year, the jobless rate was 2.4%. The youth unemployment rate, which is applied to the 15-24 age group, also held steady at 3.2%. Data also showed that the seasonally adjusted jobless rate rose to 3% from 2.9%.

Europe
European stocks turned in a mixed performance on Monday as investors reacted to the developments on the political front after France's Prime Minister Sebastien Lecornu submitted his resignation to President Emmanuel Macron, barely a few hours after unveiling his cabinet. The yield on Germany's 10-year Bund rose to 2.73% this morning following the latest political developments in France. Despite regaining some lost ground after a sharp early setback, the French stock market languished in negative territory as the mood remained quite bearish following a warning from Socialists that they would vote against the government if its fails to break with the President's past policies. Traders also digested the latest batch of regional economic data, and continued to assess the potential impact of the government shutdown in the U.S. Bank stocks were among the major losers. In the UK market, miners and energy stocks found support thanks to higher commotity prices. The pan European Stoxx 600 edged down 0.04%. The U.K.'s FTSE 100 closed down by 0.13%, and Germany's DAX settled flat, while France's CAC 40 ended 1.36% down, despite recovering some lost ground. Switzerland's SMI climbed 0.35%. Markets in Austria, Belgium, Finland, Greece, Ireland, Poland, Spain and Turkiye closed weak. Czech Republic, Denmark, Iceland, Netherlands, Norway, Portugal, Russia and Sweden ended higher. In the UK market, Prudential, Endeavour Mining, BP, Admiral Group, Glencore, SSE, Shell and gained 1.3 to 3%. Shares of paper and packaging company Mondi tanked 16%, after the company warned of weak demand and falling prices across most pulp and paper grades. Metlen Energy & Metals closed down by 2.9%. Kingfisher, BAE Systems, Diageo, IMI, Bunzl and 3i Group lost 1.6 to 2%. In the German market, BMW rallied about 3.3%. Hannover Rueck also gained more than 3%. Munich RE climbed about 2.5%.

United States
Following the mixed performance seen during last Friday's session, stocks moved mostly higher over the course of the trading day on Monday. With the upward move, the Nasdaq and the S&P 500 reached new record closing highs. The Nasdaq climbed 161.81 points or 0.7 percent to 22,941.67 and the S&P 500 rose 24.49 points or 0.4 percent to 6,740.28, although the narrower Dow bucked the uptrend and edged down 63.31 points or 0.1 percent to 46,694.97. The strength in the markets largely reflected a rally by semiconductor stocks, with the Philadelphia Semiconductor index surging by 2.9 percent to a record closing high. Advanced Micro Devices (AMD) led the sector higher, soaring by 23.7 percent after the chipmaker announced a 6 gigawatt agreement to power OpenAI's next-generation AI infrastructure across multiple generations of AMD Instinct GPUs. Tesla stock rose in Monday trading after the electric-vehicle maker teased a major announcement. The company shared a short video on social-media platform X showing the headlights of a vehicle surrounded by darkness. A separate video showed a Tesla wheel or fan spinning and ended with the date “10/7.” Investors were excited. Tesla added 5.5%, closing at $453.25, while the S&P 500 rose 0.4% and the Dow Jones Industrial Average fell 0.1%. Tesla didn’t respond to a request for comment.

Asia
The stock markets in East Asia and Australia showed mixed trends on Tuesday. Following the previous day's bull market in response to the election of politician Sanae Takaichi as LDP leader and thus likely future prime minister, Tokyo continued to rise slightly. The Nikkei 225 index rose 0.6 per cent to 48,227.44 points, reaching another all-time high. The stock market is talking about the so-called ‘Takaichi trade’. Takaichi is considered a monetary dove and at the same time an advocate of increased government spending. As a result, the yield curve is steepening. The yield on the latest 30-year government bond has already reached a record high of 3.31 per cent.

Bonds
In the U.S bond market, treasuries extended the pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.3 basis points to 4.162 percent.

Analysis
Vontobel raises Galderma to Buy (Hold) – Target price CHF 155
Warburg raises Kion target to EUR 64 (62) – Buy
Nuways raises Platform Group target to EUR 21 (19) – Buy

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