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S&P 500, Nasdaq higher; Dow dips

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New French prime minister resigns; euro down

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Japan ruling party elects new leader; yen weakens

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Bitcoin hits record high

(Updates with U.S. closing levels)

By Caroline Valetkevitch

NEW YORK, Oct 6 (Reuters) - Major stock indexes mostly

rose on Monday, with the S&P 500 and Nasdaq posting record

closing highs after news of AMD's artificial

intelligence chip-supply deal with OpenAI, while the yen and

euro weakened against the dollar after Japan's ruling party

elected a new leader and France's new government quit.

Bitcoin

hit a record high

as investors increasingly sought alternative assets and

uncertainty prevailed with the U.S. government shutdown. The

world's largest cryptocurrency was last up 2.05% at

$125,295.33.

The euro was last down 0.26% at $1.171 . New French

Prime Minister Sebastien Lecornu resigned on Monday, barely 14

hours after appointing his cabinet.

The yen weakened after Japan's ruling party picked conservative

Sanae Takaichi, putting her on course to become the nation's

first female prime minister. She is an advocate of late premier

Shinzo Abe's "Abenomics" strategy to boost the economy with

aggressive spending and easy monetary policy. The yen was

down 1.93% against the greenback.

AI-related dealmaking boosted sentiment in equities, with

AMD shares jumping 23.7% and other chip companies' stocks also

rising. The Philadelphia Semiconductor Index gained 2.9%.

Crypto-related firms such as Coinbase also rose.

But Wall Street indexes ended mixed, with the Dow slightly

lower as the U.S. federal government shutdown dragged on for a

sixth day. The shutdown has postponed the release of key

economic indicators.

"The market is extending its momentum bias. It's shrugging

off the (U.S.) government shutdown and, because of that, there's

a belief that perhaps the Fed is going to be more generous than

the market previously expected," said Peter Cardillo, chief

market economist at Spartan Capital Securities in New York.

The Federal Reserve is widely expected to cut interest rates

again by 25 basis points at its October 28-29 meeting, following

data that shows a weakening labor market.

Moreover, Cardillo said, "We're not far away from

third-quarter earnings, and it looks as though it'll be another

good earnings season." Earnings season for S&P 500 companies

unofficially kicks off next week with reports from some big U.S.

banks.

The Dow Jones Industrial Average fell 63.31 points,

or 0.14%, to 46,694.97, the S&P 500 rose 24.49 points, or

0.36%, to 6,740.28 and the Nasdaq Composite rose 161.16

points, or 0.71%, to 22,941.67.

MSCI's gauge of stocks across the globe rose

2.85 points, or 0.29%, to 996.06.

The pan-European STOXX 600 index fell 0.04%.

French political instability has ramped up since Emmanuel

Macron's re-election in 2022, with no party or grouping holding

a parliamentary majority.

In Japan, Takaichi beat the more moderate Shinjiro Koizumi

in the Liberal Democratic Party's leadership vote.

Short-dated Japanese government bond yields slid to a

two-week low as traders pared bets on when the

Bank of Japan will resume raising interest rates.

"There's a little bit more focus on the back end of the

curve now, just given that Takaichi is generally seen as a

follower of Abenomics. The market expects a little bit more

fiscal stimulus there," said Sarah Ying, head of FX strategy,

FICC Strategy at CIBC Capital Markets in Toronto.

Gold surged to an all-time high above $3,900 per ounce, helped

in part by the economic and political uncertainty in the U.S.,

France and Japan. Spot gold was up 1.85% at $3,957.78 an

ounce.

Benchmark U.S. Treasury yields

edged higher as

the shutdown left investors without key economic data. The

yield on the benchmark U.S. 10-year Treasury note

was last up 4.7 basis points to 4.166%

Oil

prices also rose

after OPEC+'s planned production increase for November was

more modest than expected. U.S. crude gained 81 cents to

settle at $61.69 a barrel, while Brent climbed 94 cents

to settle at $65.47.

(Additional reporting by Karen Brettell in New York, Kevin

Buckland in Tokyo and Lucy Raitano in London; editing by Alison

Williams, Nick Zieminski, Richard Chang and Cynthia Osterman)