Cars drive past the Federal Reserve building on September 17, 2024 in Washington, DC.
This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Another record high for stocks
The S&P 500 and Dow Jones Industrial Average closed at a fresh high Wednesday. Technology stocks climbed, pushing up the Nasdaq Composite. Asia-Pacific markets rose Thursday, led by rebounds in mainland Chinese and Hong Kong stocks. Japan's producer price index rose 2.8% in September from a year ago, higher than the 2.3% expected by a Reuters poll.
Close to record close for Nvidia
Nvidia shares have rallied 25% in the last month and are currently trading at $132.11. That's inches away from its record close of $135.58. Nvidia is now the world's second biggest company in terms of market capitalization, overtaking Microsoft and behind only Apple. "We see NVDA remaining the leader in the AI training and inference chips," Mizuho analysts wrote in a note on Wednesday.
Get top local stories in DFW delivered to you every morning. Sign up for NBC DFW's News Headlines newsletter.
Backing off from Pfizer campaign
Former Pfizer CEO Ian Read and ex-CFO Frank D'Amelio said they would step away from activist investor Starboard Value's campaign to turn around the pharmaceutical company. "We are confident that over time they will deliver shareholder value," Read and D'Amelio said of the current management in a Wednesday joint statement made via Guggenheim Securities.
Former Tata Sons chairman passes away
Ratan Tata, the former chairman of the Indian conglomerate Tata Sons, passed away on Wednesday, aged 86. After the news broke, tributes poured in from industry leaders and politicians. As chairman, Tata was instrumental in spearheading over 60 global acquisitions, helping to grow the group's revenue past $100 billion during his tenure.
[PRO] Gen AI disrupting Microsoft
With its $1 billion investment in OpenAI in 2019, Microsoft was one of the first Silicon Valley giants to spot the potential of generative AI. But it's precisely gen AI that might disrupt Microsoft's business model and lower its profit margins, according to a fund manager whose fund has outperformed its benchmark, the IA Global Sector average, most years.
Money Report
The bottom line
Markets are still in the woods.
Hurricane Milton's made landfall in south central Florida. The storm will reduce fourth-quarter gross domestic product growth in the U.S. by up to 0.4 percentage points, said EY Chief Economist Gregory Daco.
Tensions in the Middle East remain high. While oil prices have calmed down, there's a risk that global benchmark Brent oil will surge by $10 to $20 per barrel, if Israel attacks Iranian oil infrastructure, according to a Goldman Sachs research note.
The yield curve between the 2- and 10-year Treasury notes is steepening. And the S&P 500 "is vulnerable to bigger corrections when the yield curve is steepening," Bank of America technical analyst Stephen Suttmeier wrote in a client note.
That's a thorny thicket to navigate through. Yet markets are hitting all-time highs.
The S&P 500 climbed 0.71% to close at 5,792.04, a fresh record. Likewise, the Dow Jones Industrial Average finished the day at a new high of 42,512.00, adding 1.03%. The Nasdaq Composite rose 0.6%, fueled by technology stocks including Amazon, Apple and Super Micro Computer.
Sentiment in markets, it seems, was buoyed by encouraging comments from the Fed. Minutes of the central bank's September meeting stated that "a substantial majority of participants" backed a jumbo cut "in light of the progress on inflation and the balance of risks."
Fed Vice Chair Philip Jefferson reemphasized that stance, saying in a Tuesday event that "to maintain the strength of the labor market, my FOMC colleagues and I recalibrated our policy stance last month."
The Fed, in other words, is keeping a close eye on the economy and wants to make sure it maintains its smooth landing.
"You wake up and there's a headline about the hurricane, energy. At this point, we're really not seeing a lot of those risks getting priced in," Mike Bailey, director of research at FBB Capital Partners, pointed out. "The Fed is the key thing, that's the big driver."
It's as if markets are merrily singing the line from Stephen Sondheim's musical: "Into the woods to get the money." Investors just need to make sure they're home before dark.
– CNBC's Jeff Cox, Samantha Subin and Sarah Min contributed to this story.
