The relentless engine of the artificial intelligence revolution has roared to life once again, as a landmark deal between the AI titan OpenAI and the chipmaker AMD sent a powerful jolt through global markets, igniting a stunning rally that has propelled Japan’s Nikkei 225 to a new record high for the second consecutive session.
This powerful, tech-led surge is the story of a new alliance, a direct and formidable challenge to the long-held dominance of the chip giant Nvidia, and it is providing a potent dose of optimism to a market still grappling with a major political upheaval in Tokyo and a brewing storm in the bond market.
A tech-fueled ascent in Tokyo
The star of the session is once again Japan, where the Nikkei 225 has continued its spectacular ascent.
The index’s record-setting performance is being powered by a furious rally in the nation’s chip stocks, a direct echo of the action on Wall Street.
Shares of the chip-testing giant Advantest rose over 4 percent, while Tokyo Electron and Renesas Electronics also posted strong gains.
This tech-fueled rally builds on the momentum from Monday, when the market soared after the country’s ruling Liberal Democratic Party elected the staunch conservative Sanae Takaichi as its new leader, a move that has ignited hopes for a new wave of fiscal stimulus.
A bond market in turmoil
But even as the stock market celebrates, a very different and far more ominous story is unfolding in the Japanese bond market.
Yields on government debt have surged to new all-time highs, a clear sign of deep and growing investor anxiety.
The yield on the 10-year bond has climbed to its highest level since 2008, while the 30-year yield has hit a new record.
This dramatic sell-off in the bond market stands in stark and worrying contrast to the unbridled optimism in the equity space.
The Wall Street catalyst: a new king in the chip race?
The catalyst for this global tech rally was a stunning development on Wall Street.
Shares of AMD skyrocketed almost 24 percent after the company announced a major new deal with OpenAI, a partnership that could see the AI leader take a 10 percent stake in the chipmaker.
The move is being seen as one of the most direct challenges yet to the long-held dominance of Nvidia in the AI chip space and has sent a powerful ripple of excitement through the entire sector.
The AMD surge was so powerful that it lifted both the S&P 500 and the tech-heavy Nasdaq to fresh record highs, even as the blue-chip Dow Jones Industrial Average slipped.
A bullish wave hits Dalal Street
This powerful global tailwind is also providing a strong lift to the Indian market. The Sensex has opened 140 points higher and the Nifty has climbed above the 25,100 mark, as Dalal Street continues to ride the powerful wave of optimism.
As a new and volatile day begins, and with Chinese, Hong Kong, and South Korean markets closed for holidays, the AI trade is once again the only story that matters.
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