The Japan Times - Stocks, gold rise as investors weigh AI boom, political turmoil

Wall Street rose at the open, a day after the S&P 500 and tech-heavy Nasdaq surged to fresh records, buoyed by a multi-billion-dollar partnership deal between ChatGPT developer OpenAI and chipmaker Advanced Micro Devices (AMD).

"Investors continue to 'follow the money' when it comes to anything to do with generative artificial intelligence," David Morrison, senior market analyst at Trade Nation, said in a note.

"This is despite fears that the whole investment thesis looks increasingly incestuous, as money gets pumped around companies within the sector," Morrison said.

AMD shares gained seven percent in early deals Tuesday after double-digits gains on Monday.

The Paris stock market edged back up after a sell-off, even as President Emmanuel Macron faced a call from his first prime minister, Edouard Philippe, to resign over a deepening political and budget crisis.

London and Frankfurt were also slightly higher in afternoon deals, but the euro fell further against the dollar.

Philippe, himself an aspirant to the presidency, urged Macron to call for an early presidential election.

"He must take the decision that is worthy of his function, which is to guarantee the continuity of the institutions by leaving in an orderly manner," Philippe told the RTL broadcaster.

The latest crisis erupted after Prime Minister Sebastien Lecornu, appointed less than a month ago, stepped down on Monday after failing to rally support across the centre-right coalition for his new government.

Macron later ordered him to make a last-ditch effort to rally support for a coalition government, but there was no sign of progress.

Gold hit a fresh peak of $3,977.44 an ounce Tuesday, before slightly paring gains, as investors eyed the US government shutdown, with Republicans and Democrats appearing no closer to an agreement.

Bets on the Federal Reserve cutting interest rates this month and the political crisis in France are adding to the allure of the safe-haven asset.

"The rally in gold is part of the 'debasement' trade," said Kathleen Brooks, research director at trading group XTB.

"This trading theme is driving demand for alternative assets such as gold and crypto, as the dollar faces a long-term decline and fiscal concerns continue to rise around the world," she added.

In Asia, Tokyo eked out another record following the weekend election of a pro-stimulus advocate to lead Japan's ruling party, before paring gains to close flat.

The election of Sanae Takaichi -- expected to become Japan's prime minister this month -- ramped up optimism that she will kick-start the economy through stimulus measures.

That sent the Nikkei 225 soaring almost five percent Monday and hammered the yen as investors began questioning the likelihood that the Bank of Japan will continue its interest rate hikes.

"Her agenda is expected to continue a blend of fiscal support and ultra-easy monetary policy," said Saxo Markets' chief investment strategist, Charu Chanana.

Yields on 30-year Japanese bonds hit their highest level, reflecting fears the country's already colossal debt will balloon further.

- Key figures at around 1330 GMT -

New York - Dow: UP 0.2 percent at 46,773.99 points

New York - S&P 500: UP 0.1 percent at 6,748.44

New York - Nasdaq Composite: UP 0.1 percent at 22,964.30

London - FTSE 100: UP 0.1 percent at 9,490.49

Paris - CAC 40: UP 0.2 percent at 7,984.76

Frankfurt - DAX: UP 0.2 percent at 24,436.51

Tokyo - Nikkei 225: FLAT at 47,950.88 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.1667 from $1.1713 on Monday

Pound/dollar: DOWN at $1.3423 from $1.3485

Dollar/yen: UP at 150.80 yen from 150.24 yen

Euro/pound: UP at 86.93 pence from 86.86 pence

Brent North Sea Crude: DOWN 0.7 percent at $65.04 per barrel

West Texas Intermediate: DOWN 0.7 percent at $61.29 per barrel

T.Maeda--JT