Morning Bid: As oil swoons, AI recharges

• AMD became the latest chipmaker to reach $1 trillion valuation as the SOX chip index rose over 4%; South Korean semiconductor exports jumped 259.4% in early September to record levels
• Brent crude fell below $100/barrel after Iran offered to reopen Strait of Hormuz within seven days if the US eases military pressure, while Saudi Arabia restarted its East-West Pipeline
• French debt stress intensified with the 10-year premium over Germany rising above 100 basis points for the first time in recent periods, and credit default swap costs hitting six-year highs amid budget and election concerns

Market Summary: AI Stocks Rally as Oil Prices Retreat

Key Market Movements:

Meta's stock surged over 11% on Monday following strong demand for its new AI assistant, Muse, reigniting enthusiasm across the AI sector after recent concerns about AI risks. AMD reached a $1 trillion market valuation, becoming the latest chipmaker to hit this milestone. The SOX chip sector index jumped more than 4%, while Asian tech stocks rose broadly on Tuesday.

Oil Market Developments:

Crude oil prices retreated below $100 per barrel (Brent) on diplomatic hopes. Iran reportedly offered to reopen the Strait of Hormuz within seven days if the U.S. eases military pressure, according to Kyodo News. Saudi Arabia also restarted operations at its East-West Pipeline, adding to supply relief.

Geopolitical Focus:

The UN General Assembly this week features a critical meeting between President Trump and China's Xi Jinping, with AI risks, trade truce extensions, and Taiwan tensions on the agenda. Trump may also meet with Iranian President Masoud Pezeshkian. Additionally, Trump pressured Ukrainian President Zelenskiy to halt strikes on Russian oil refineries.

European Debt Concerns:

French sovereign debt underperformed as budget concerns and upcoming presidential elections weighed on markets. The French 10-year borrowing premium over Germany exceeded 100 basis points for the first time in recent periods, while credit default swap costs reached six-year highs.

Supporting Data:

South Korean exports rose 78.3% in the first 20 days of September to $71.4 billion—a record 20-day performance—with semiconductor shipments up 259.4%.

Fed Commentary:

Chicago Fed President Austan Goolsbee signaled hawkish concerns about services inflation and demand-driven price pressures beyond elevated energy costs.