After experiencing declines on the previous trading day, the NASDAQ stock index futures rose on Friday; OpenAI's revenue data fell short of expectations, which previously suppressed the booming market in the AI sector.

The Dow Jones rose by 0.15%, the S&P 500 index rose by 0.32%, and the Nasdaq index rose by 0.57%.

"Seven Sisters" group: Tesla rose 2.04%, Microsoft rose 1.31%, Amazon rose 1.01%, Google rose 0.92%, NVIDIA rose 0.90%, Meta Platforms rose 0.50%, Apple fell 2.18%.

Technology sector ETF ( XLK ) rose by 1%. The technology sector as a whole rebounded, with SpaceX surging 3% to lead the gains. This aerospace satellite company, led by Elon Musk, saw its stock price rise due to a national spectrum asset acquisition deal. The stock prices of AT&T, Verizon, and T- Mobi fell as investors worried that this deal would intensify competition in the telecommunications industry.

Other tech stocks that rose on Friday included Lumentum and Kelai, which rose by 6% and 2% respectively.

On Thursday, the AI sector experienced a decline. It was reported that OpenAI disclosed to investors that its annualized revenue at the end of September was $50 billion. The figure that was widely circulated in the market last month was $68 billion, but people familiar with the matter stated that this figure previously included the total revenue brought in by partners as well.

The Nasdaq Composite Index (.IXIC) fell by more than 1%, recording the largest single-day decline since mid-August. Earlier this week, the technology-heavy index had just set a new all-time high, but on Thursday it closed lower for the second consecutive trading day.

Analyst Adam Kressafulli writes: 'This round of selling reflects an extreme imbalance in market positions. In our view, there is still room for further adjustment of these positions. Therefore, it is unlikely that the entire AI technology sector will see a sharp V-shaped reversal directly.'

He added, "When it comes to AI, the core issue is not the difference between total revenue and net revenue under the annualized revenue metric, but rather two points: first, the attractiveness of the business model of independent cutting-edge large-scale model laboratories is declining; second, there are increasingly many signs that the market is beginning to resist the flood of debt and equity financing flowing into the AI sector."

So far this week, the Dow Jones Index and the Nasdaq Composite Index have remained relatively flat; the broad-based S&P 500 Index is expected to record a gain of 0.6% this week.

The impact on French bonds was particularly severe.

U.S. Treasury prices resumed their decline. Previously, the bond market experienced a period of turbulent trading, with yields eventually falling from decades-high levels. On Friday, the yield on 10-year U.S. Treasury bonds rose by 2 basis points to 5.25%.

The European bond market rose, following the rebound at the close of the previous trading day in the U.S. bond market, with French government bonds leading the performance. Earlier this week, France became a focus of global investors due to fiscal pressures and political deadlock that sparked market concerns. The yield spread between French and German government bonds narrowed after expanding recordingly in a single week. Investors require an additional yield of about 136 basis points to hold French 10-year government bonds compared to German bonds of the same maturity, and this spread is expected to narrow by nearly 5 basis points this week.

France has been particularly hit by this round of global bond sell-offs. As the 2027 presidential elections approach, investors are closely examining France's debt burden, fiscal deficit, and political prospects.

Trump promises not to attack Iran

Brent crude oil prices fell below $103 per barrel. Previously, U.S. President Donald Trump stated that the United States would not launch an attack on Iran before the midterms and mentioned that the U.S. was engaged in "fructuous discussions" with Tehran. On the previous trading day, due to market concerns that the situation in the Middle East might escalate soon, Brent crude oil prices reached a two-week high.

Rising oil prices have always been a significant factor suppressing stock market performance, as high energy costs continue to fuel concerns about interest rate prospects in the market, partially offsetting the support provided by strong corporate earnings. Previously, solid corporate profit performance drove the S&P 500 index to record highs. At the same time, although there is still optimism about AI in the market, there is still great uncertainty about which companies will ultimately be able to reap substantial profits from it, especially against the backdrop of rising borrowing costs.

The Francisco Simon from Santander Asset Management indicates: 'The main risk faced by the AI transaction is not necessarily a collapse in demand, but rather a gradual slowdown in growth or the ability to monetize through commercialization, which may ultimately fail to meet the market's increasingly ambitious expectations.' He added, 'Even if it's just some incremental information, it could trigger an overreaction in the market.'

Pay attention to next week's financial report season.

CaixaBank of Asset Management Company stated that as major U.S. banks are set to officially kick off the third-quarter financial reporting season next week, corporate earnings will increasingly become the main factor driving stock market trends, rather than uncertainties in the macroeconomy.

He stated that corporate financial reports "will ultimately determine whether the strong fundamentals can continue to support the current stock valuations."

Swiss Life Banque Priv ée's Mary - Sol Michel pointed out that a moderate adjustment in September has already brought stock valuations back to a relatively reasonable level, which means that the upcoming earnings season is expected to provide support for the market.

She stated, "We expect that AI transactions will still be the main driving force for the market, as evidenced by the impact of the latest revenue data from OpenAI. Of course, rising oil prices are exacerbating inflationary pressures and driving up bond yields, but as the mid-term elections in the United States approach, this situation is expected to ease to some extent."

AI Enterprises Trigger a New Wave of Debt Financing

Investors are also evaluating a new round of financing plans in the tech industry. It is expected that SpaceX, Broadcom, and Oracle will all raise several billion dollars to purchase advanced AI chips. Firmus, an Australian data center operator supported by NVIDIA, has postponed its initial public offering (IPO) plan, which was set to raise $5 billion, on the grounds of market volatility, and stated that it will instead seek private financing.

Rising energy costs, market expectations that central banks will further raise interest rates, and concerns over the continuous increase in government debt have collectively driven the global bond market into a sell-off for several months, leading to steadily climbing borrowing costs.

Shengbao Bank's Chief Investment Strategist Charu Chanana stated: "As the yields on long-term government bonds have returned to near their highest levels in decades, investors can no longer value the growth prospects of AI companies using the same logic applied during times of low capital costs."

Chanana points out that the rise in sovereign bond yields, coupled with companies increasing debt financing to build AI infrastructure, means that capital is becoming 'more expensive and also more selective.' This has made the solidity of corporate balance sheets and the quality of future earnings the focus of investors' attention.

The trend of the US dollar remains relatively stable, but it is still expected to rise for the fourth consecutive week. The euro, on the other hand, is likely to fall for the fifth consecutive week. The euro is trading around 1.123 against the US dollar, near its 17-month low reached earlier this week, with concerns over France's debt issues continuing to put pressure on the euro.

Gold prices rose by more than 1%, reaching around $4,191, and briefly broke through $4,200 during the day, supported by a slight weakening of the US dollar and a decline in oil prices.

After Waller's comments, Goldman Sachs raised its expectations for interest rate hikes: There may be two more hikes, with a 25-basis-point increase in December.

After Federal Reserve Board member Christopher Waller made hawkish remarks at the Central Bank of Turkey forum in Istanbul, Goldman Sachs chief economist Jan Hatzius stated that the Fed might choose to raise interest rates twice more, rather than just once in December.

Harcius stated in a report that it might be more appropriate to raise interest rates twice more, as the probability of raising rates only once in December has already decreased.

This analyst stated that Waller's speech marks a shift in his stance from previously emphasizing a core PCE inflation rate of 3% annually to a more hawkish position. However, Goldman Sachs still expects the Federal Reserve to raise interest rates by another 25 basis points in December.

Bank of America: Investors are flocking to cash assets, and this trend is unlikely to change in the short term.

Michael Harnett, a strategist at Bank of America, stated that investors are pouring funds into cash funds at the fastest pace since the COVID-19 pandemic, and it is unlikely that this trend in asset allocation will change in the short term.

Hartnett pointed out in a report released on Friday that unless the Federal Reserve implements "massive monetary easing" and continues to cut interest rates, a large amount of cash funds that are currently on the sidelines are expected to remain in money market funds.

In the week ending October 7, money market funds saw a net inflow of $166.4 billion, reaching the highest level since April 2020.

Responsible Editor: Guo Mingyu