Issue #29 - Markets Rally on Inflation Relief, AI Partnerships, and Jobs Week Ahead

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What’s in this issue;

This week’s issue explores the drivers behind global market gains, as easing inflation worries lift stocks across the US, UK, and Europe. We highlight major moves in tech and AI—Intel seeks a potential investment from Apple, Nvidia’s UK AI push accelerates, and Alibaba expands its AI ambitions.

In corporate news, key earnings and strategic shifts provide insights into market resilience, while jobs week and central bank policies set the stage for the economic narrative ahead. From geopolitical developments to sector-specific opportunities, we break down what investors need to watch in the coming days.

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Weekly Movement - Heatmaps

Global Markets Lifted by Easing Inflation Worries

Markets across Europe, the UK, and the US closed higher on Friday after the latest US PCE inflation report came in exactly as expected. For Europe, the in-line reading eased concerns that the Federal Reserve might tighten policy further, giving investors breathing room.

In the UK, the FTSE 100 jumped not only on the inflation relief but also thanks to a weaker pound and gains in big commodity names. Meanwhile in the US, stocks snapped a three-day losing streak as investors poured back into tech and consumer shares, betting that the Fed can now take a more measured approach to interest rates.

In short, the same data point gave global markets a lift, but each region found its own extra reasons to rally.

📌 What This Means for Investors

• Cooling inflation without surprises reassures markets and reduces the risk of sudden rate hikes.

• UK investors may see commodity-heavy and globally exposed companies continue to benefit from a weaker pound.

• In the US, tech and growth stocks remain sensitive to interest rate expectations — rate stability could support further gains.

🚀 What is Moving the Markets This Week

• 🏦 Fed Signals Split: Mixed messages from Fed officials kept rate cut expectations in flux. Powell stayed cautious, while Miran and others pushed for deeper cuts.

• 📈 Strong Economy & Sticky Inflation: Q2 GDP revised up to 3.8% and core PCE inflation at 2.9% tempered hopes for a faster easing cycle.

• 🤖 AI Boost: OpenAI and Nvidia announce a $100B partnership to build AI data centers, lifting tech sentiment.

• 📊 Market Snapshot: S&P 500 -0.3%, Dow -0.2%, Nasdaq -0.7%.

• 🏅 Top Movers: Intel +20%, CarMax -23%, Teradyne +13%, Freeport-McMoRan -20%.

Top Economic News This Week - Highlight 1-3 major economic headlines for context with links

• Amazon agreed to pay $2.5 billion following allegations it misled millions of Prime subscribers, marking a significant consumer protection settlement.

• Starbucks announced plans to close underperforming stores as part of a restructuring effort that will result in hundreds of layoffs in the U.S. and UK.

• The U.S. economy’s growth for Q2 2025 was revised upward to 3.8%, driven by strong consumer spending. This data aligns with other reports of robust wage growth and hiring.

• The U.S. President Donald Trump has announced new tariffs on pharmaceuticals (100%), trucks (25%), and furniture (30%), effective October 1. These tariffs aim to protect U.S. manufacturers from foreign imports, mainly affecting products from India and Europe. This move reflects ongoing trade tension and protectionist measures.

• The Bank of Canada cut interest rates, providing a hopeful sign for the country’s sluggish housing market to potentially recover after months of slow home sales.

Things I’m Paying Attention To

TikTok’s U.S. Ownership Transition Finalised: On September 25, 2025, President Donald Trump signed an executive order transferring TikTok’s U.S. operations from its Chinese parent company, ByteDance, to a consortium of American investors. The deal, endorsed by Chinese President Xi Jinping, prevents the app from being banned in the U.S., as mandated by a previous law requiring TikTok’s divestiture. Under the agreement, U.S. investors, led by Oracle, will acquire 65% of the new U.S. TikTok company, with ByteDance retaining less than 20%. Oracle will manage U.S. operations, data storage, and the app’s recommendation algorithm, ensuring Chinese entities can’t access American user data. The restructured company will be governed by a seven-member board, including six U.S. national security experts, and valued at $14 billion—a significant decrease from ByteDance’s estimated $330 billion valuation. Investors include Larry Ellison, Rupert Murdoch, and Michael Dell. The divestiture is expected to be completed within 120 days.

📈 Alibaba’s AI Ambitions Propel Stock Surge: Alibaba’s stock surged nearly 8% to its highest level in almost four years after the company announced plans to increase its artificial intelligence (AI) investment beyond the previously pledged 380 billion yuan (approximately $53 billion). CEO Eddie Wu cited stronger-than-expected global demand for AI infrastructure as the catalyst for this expanded commitment. The announcement also included a strategic partnership with Nvidia to integrate Nvidia’s AI tools into Alibaba Cloud’s platform, aiming to enhance capabilities in robotics and autonomous systems. Additionally, Alibaba unveiled its Qwen3-Max AI model, boasting over a trillion parameters, positioning itself as a formidable competitor in the AI space.

Intel asking Apple for investment

Intel has approached Apple about a potential investment as part of its efforts to bolster its struggling business. The discussions are in early stages and may also include exploring closer collaboration between the two companies. Intel has been actively seeking financial backing recently, securing investments from the U.S. government, Nvidia, and SoftBank, and is now turning to Apple as another potential investor.

Intel and Apple were long-time partners before Apple shifted to using its own M-series chips from TSMC starting in 2020. Intel’s seeking investment seems to be more about supporting its comeback and manufacturing ambitions rather than influencing Apple’s chip design. The talks are tentative with no guarantees of an agreement, but Intel’s stock responded positively to the news.

Apple CEO Tim Cook has expressed support for Intel’s comeback in recent comments, which ties into Intel’s broader strategy to revive itself with new investments and partnerships

NVIDIA X UK

NVIDIA’s recent AI ecosystem celebration in London, attended by CEO Jensen Huang, UK Prime Minister Keir Starmer, and U.S. Secretary of Commerce Howard Lutnick, highlighted the UK’s strategic position in the AI landscape. The event underscored the nation’s “Goldilocks moment,” where a convergence of world-class universities, researchers, startups, and venture capitalists is poised to propel the UK into an AI superpower.

Key Highlights:

Strategic AI Infrastructure: The UK is now the world’s third-largest AI market, home to 3,700 companies and 60,000 employees. Leaders emphasised the importance of building robust AI infrastructure to support this growth.

Historic Collaboration: The partnership between the UK, U.S., and NVIDIA is described as the largest-ever tech agreement between the two nations, focusing on AI’s role in security, safety, business, and trade.

NVIDIA’s £2 Billion Investment: NVIDIA announced a £2 billion investment in the UK, partnering with venture capital firms like Accel, Air Street Capital, Balderton Capital, Hoxton Ventures, and Phoenix Court. This initiative aims to foster the UK AI startup ecosystem and scale AI’s impact across industries.

Massive AI Infrastructure Rollout: Plans are underway to deploy 120,000 NVIDIA Blackwell GPUs, marking the largest AI infrastructure rollout in UK history. By 2026, up to 60,000 GPUs will power new AI factories with partners like Microsoft, Nscale, OpenAI, and CoreWeave.

Quantum-GPU Supercenter: NVIDIA and Oxford Quantum Circuits are collaborating to build a quantum-GPU supercenter, advancing the UK’s leadership in frontier science.

Robotics R&D Hub: In partnership with techUK and QA, NVIDIA is launching a robotics R&D hub to train and upskill the next generation of AI talent.

These initiatives aim to position the UK as a global leader in AI, driving innovation, economic growth, and job creation.

AMD Where Does Nvidia and intel Deal Leave Them

Nvidia and Intel have entered a landmark partnership with Nvidia investing $5 billion in Intel to jointly develop next-generation AI and PC chips. Intel will design custom CPUs that integrate with Nvidia’s RTX GPUs using Nvidia’s NVLink technology, enabling high-speed connections critical for AI workloads. This alliance strengthens Intel’s competitiveness in AI and GPU markets, historically led by Nvidia and AMD.

For AMD, this deal poses a significant challenge as the Intel-Nvidia collaboration offers a tightly integrated CPU-GPU platform that could pressure AMD’s market share in data centers and consumer PCs. Intel gains cutting-edge GPU tech and AI capabilities, potentially eroding AMD’s position. However, analysts note AMD’s agility and strong product roadmap could help it stay competitive, though it will likely face increased pressure to innovate rapidly.

Overall, the Nvidia-Intel partnership reshapes the semiconductor landscape, boosting Intel’s AI relevance and posing intensified competition for AMD in a market increasingly driven by AI and integrated chip solutions

🧬 Hot Take: Utilities Aren’t Just Defensive Anymore

Traditionally the backbone of defensive portfolios, utilities are evolving. Beyond steady dividends and predictable cash flows, some are starting to resemble growth stocks—especially those tied to renewables, AI data centers, and electrification. Investors need to know: utility types (electric, multi-utility, IPPs, renewables) come with very different risk/reward profiles, and country-specific factors—from regulation to energy costs—can dramatically affect performance.

Secular tailwinds like rising GDP per capita, electrification, and AI-driven energy demand support long-term growth, while interest rate sensitivity, regulatory caps, capital intensity, and weather risks complicate the picture. Strategic allocation to utilities can provide stability, dividends, and even act as a hedge against your own energy costs—but don’t expect a smooth ride.

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🔮 Looking Forward: What’s Next on the Market Radar

The market gears up for a packed week, with focus squarely on the labor market. After the Fed’s recent rate cuts, investors will be watching closely for any signs of cooling—or resilience—in US jobs.

Labor Market in Focus:

Tuesday: August job openings (JOLTs) arrive. Expectations: a slight dip to 7.1M, signaling a possible easing in labor demand.

Wednesday: Private employment figures. Another piece of the puzzle to gauge overall job market health.

Friday: September nonfarm payrolls. Forecast: a modest 70K gain, a rebound that would point to a cooling labor market without signaling collapse.

Corporate Earnings Highlights:

Some major names hit the tape this week, offering clues on consumer trends and corporate resilience ahead of Q3:

• Monday: Carnival Corp, Jefferies Financial, IDT

• Tuesday: Nike, Paychex, Lamb Weston Holdings

• Wednesday: Acuity Inc., Conagra Brands, Cal-Maine, Rezolve AI

• Thursday: AngioDynamics

Other Key Events:

• Monday: US pending home sales rebound could hint at housing stability.

• Tuesday: RBA interest rate decision in Australia; market eyes steady 3.6% as central banks juggle growth and inflation.

• Wednesday: UK housing prices may continue to inflate, adding to cost-of-living pressures.

While Q3 earnings officially kick off in October, these reports offer an early read on market sentiment and economic trends—especially in consumer and services sectors.

💡 Takeaway: It’s jobs week, earnings week, and a key moment for central bank watchers. Keep an eye on labor data and corporate updates—they’ll set the tone for the final quarter of the year.

ICYMI

Market Developments

- UK composite PMI in September slipped to 51 from 53.5 in August, showing slower but positive growth. Manufacturing contracted while services remained the main growth driver despite cost pressures. Private sector job cuts are ongoing amid higher costs and weak demand.

- US-India trade talks face complications due to India’s rising Russian oil imports amidst existing tariffs, generating market caution despite some optimism from President Trump-Modi discussions.

- US Federal Reserve cut rates slightly to 4%-4.25%, balancing inflation with a cooling labour market; economic growth rebounded to 3.3% annualised in Q2.

- US equity markets reached record highs supported by strong earnings and government semiconductor production plans, though volatility from inflation and geopolitical frictions continues.

- Asia showed mixed performance with China in deflationary territory and Japan’s markets surging after easing inflation and a new US trade deal.

UK Market Specifics

- UK housing market remains relatively stable with modest price gains expected; mortgage rates have eased slightly following Bank of England rate cuts.

- Retail sales in the UK surprised positively but consumer confidence weakened due to borrowing and price pressures; government borrowing reached a 5-year high.

- London’s construction sector is under strain with falling approvals and restrictive policies risking new housing supply collapse.

- Private hospital operator Spire Healthcare's share price surged amid potential sale speculation, and Trustpilot reported strong H1 results leading to optimism for full-year profitability.

Other Notable Stories and Insights

- Global economic outlook remains uncertain with divergent regional growth: subdued US prospects, fragile but improving Europe, Chinese deflationary pressures, and stronger momentum in regions like Sub-Saharan Africa.

- AI is driving a significant equity market boom underpinned by fundamentals rather than a bubble, highlighting technology sector optimism.

- Private markets show resilience with steady EBITDA growth in US, European, and UK companies supported by less-cyclical service sectors and lower interest rates.

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