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On Tuesday, the US’s leading index achieved a record high despite the sell-off in bonds. Markets rallied in response to high earning expectations thanks to the trillions of dollars pouring into AI infrastructure. According to Factset, analysts are expecting Q3 earnings growth of 29.5%. Chipmakers Nvidia and Micron are expected to account for more than a third of that growth. Some of this bullishness was dented on Thursday after OpenAI told investors that revenue for this year will be $50bn, $20bn less than estimated in September.

With AI development and the race for superintelligence showing no signs of slowing down, OpenAI CEO, Sam Altman advocated for a light touch regulatory stance in an interview on Monday. He said that the world should just accept “some bad things happening” in exchange for the benefits AI may bring…

The quarter to end of September was a strong period for the global equity market, but this statement hides a lot of what was occurring “under the bonnet”. The global equity index was lifted in September mainly by the strong performance in the US market while other regions delivered negative returns, reversing some of the strong gains we’d seen over the summer months.

The US equity market posted a positive return of +2.9% in Q3, as this is such a large proportion of the global index, this helped the global benchmark return +2.4%. However, we need to look at things a little closer…

In his first conference speech as Labour party leader and Prime Minister, we got several important policy updates from Andy Burnham. From April 2030 the government will finally “rip the plaster off” and amend the pensions triple lock to not necessarily keep pace with workers’ earnings. Electoral reform is back on the agenda, and a new in-out EU referendum could be included in the next Labour election manifesto. Prior to the conference, the reboot of Help to Buy to become the Your First Home Scheme sent housebuilding stocks up on Monday.

The latest US-China summit went as expected with pageantry being prioritised over policies. The trade truce between the two nations was extended by two months and they agreed to establish a “communication channel” to report AI incidents before their next meeting in November.

While all the major AI moguls dined in the White House, markets reacted positively to the lack of guardrails around AI development despite a batch of new stories containing more examples of agents going off script and hacking government institutions, like the Australian healthcare database. The leading US tech index is now up 2.45% since former Anthropic researcher Jacob Coxon’s tweets on the existential threat from superintelligent AI went viral three weeks ago.

Taiwan, the soon-to-be-expiring trade truce and the global energy crisis might have to take a backseat to AI when Trump and Xi meet this week in Washington.

After a week of nonstop press coverage that has seen the existential threat from superintelligent AI enter the mainstream discourse, investors will be watching out for any agreements that allow for a mutual ‘slowdown’. On Sunday, Treasury Secretary Scott Bessent said a new AI safety notification mechanism has been proposed for the two leaders to consider during the summit. While it looks unlikely either Trump or Xi will be willing to put further guardrails in place, according to leaks this weekend, some senior officials in the Trump administration are frustrated about his refusal to take the subject seriously and will try to convince Trump to push for more oversight and international agreements with China…

Global stocks broadly rose in August on the back of stronger corporate earnings across regions. Notably, technology and Artificial Intelligence (AI) related stocks rallied after experiencing a sharp sell-off in July. Surging cloud revenues helped Microsoft and Amazon report better-than-expected growth, and chip giant Nivida posted record- breaking quarterly revenues of $96bn, more than double what they generated in the same period last year.

The tech sector experienced some meaningful swings as investors grapple over whether the large capital expenditure that has been poured into these businesses will ultimately pay off in terms of the revenue it is expected to generate…