AI cheer banishes rate hike fear

Résumé détaillé

By Jamie McGeever ORLANDO, Florida, Nov 11 (Reuters) - US stocks leaped and Europe notched a record-high close on Wednesday, spurred by an encouraging outlook on the AI trade from neocloud firm CoreWeave. A 20% surge in the company's battered shares, and a rebound in Nvidia stock, more than offset investors' concerns that the Fed might deliver a jumbo-sized interest rate hike next month.

ORLANDO, Florida, Nov 11 (Reuters) - US stocks leaped and Europe notched a record-high close on Wednesday, spurred by an encouraging outlook on the AI trade from neocloud firm CoreWeave.

A 20% surge in the company's battered shares, and a rebound in Nvidia stock, more than offset investors' concerns that the Fed might deliver a jumbo-sized interest rate hike next month.

In my column today I look at the confusing communication coming out of the Fed, after Governor Chris Waller on Tuesday put a 50-basis-point rate hike on the table for next month. Inflation may be sticky, but we have known that for a long time. To go from a 25 bps hike in September to a pause in October, then a 50 bps hike in December, doesn't make sense.

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• Today's Key Market Moves STOCKS: Japan +1.3%, China +0.4%. Europe +0.7% to new closing high, UK +0.8%. Nasdaq +1.6%, S&P 500 +1.3%, Dow +0.5%.SECTORS/SHARES: All 11 sectors in the S&P 500 rise except consumer discretionaries. Tech +2.7%, energy +1.8%. Semiconductors +5.6%. CoreWeave +20%, Sandisk +14%, Micron and Dell +12%. Airbnb, McDonald's -3%.FX: Dollar hits 19-month high, euro 19-month low. Dollar/yen nears 160.00. Biggest G10 decliners Swiss franc and Swedish crown.BONDS: US bond market closed for Veterans Day. European yields steady, Japanese yields up slightly.COMMODITIES/METALS: Oil up ~1%. Gold -1% back below $4,000/oz.

One clear and instant consequence of the sudden possibility of a 50 bps Fed rate hike next month is the dollar's rise across the board. The dollar index on Wednesday hit its highest since April last year, and is 5% higher than it was only a couple of months ago.

So far, there has been no jawboning from Tokyo or Washington.

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