(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

Oct 14 (Reuters) - What matters in U.S. and global

markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

Wall Street's 'fear gauge' of implied stock market

volatility touched its highest in almost four months on Tuesday

as a fresh wave of AI excitement jostled with trade war tensions

and the onset of the third quarter earnings season.

The VIX earlier hit its highest since mid-June as U.S.-China

trade exchanges turned sour again overnight following Monday's

Broadcom-led stock rebound. Tuesday's packed diary includes Q3

updates from the big U.S. banks, a keynote speech from Federal

Reserve Chair Jerome Powell and the International Monetary

Fund's World Economic Outlook.

U.S. stocks snapped back on Monday, with chipmakers leading the

charge as Broadcom soared 10% on news of an OpenAI partnership

and Google announcing $15 billion of investments in datacenters

in India.

But weekend hopes of cooling U.S.-China trade tensions were

undermined again as the two countries began charging additional

port fees on ocean shipping firms that move everything from

holiday toys to oil. Treasury Secretary Scott Bessent said there

was still a chance to avert 100% U.S. tariffs on November 1 and

that a meeting of the two countries' leaders was still

possible.

U.S. stock futures relapsed about 1% before Tuesday's bell,

however, and yields on Treasuries, which had not traded on

Monday's Columbus Day holiday, plunged further.

The 30-year bond yield plummeted to its lowest since the April

trade shock even as the dollar firmed, with Bessent saying the

ongoing government shutdown was hitting the economy and "getting

serious".

Overseas, Japan's Nikkei dived 2.5% after a long weekend,

clocking its sharpest one-day drop since April as investors

fretted over uncertainty around the country's next prime

minister. In France, newly re-appointed Prime Minister Sebastien

Lecornu addresses parliament on Tuesday to spell out his budget

priorities.

U.S. crude oil prices slipped to their lowest since May, and

gold hit a new record at $4,179 per ounce - but bitcoin

continued its sharp retreat and is now down more than $10,000

from its October 6 peak.

* Broadcom jumps on OpenAI partnership: Broadcom surged

almost 10%

after partnering with OpenAI to produce the startup's first

in-house AI processors, turbocharging a broader chip rebound as

the PHLX semiconductor index jumped nearly 5% and AI bellwethers

such as Nvidia and Micron rallied. The move reinforced AI as the

market's primary dip-buyer theme, even as U.S.-China trade

tensions simmer in the background.

* JPMorgan Chase launched a $1.5 trillion plan on

Monday

to facilitate, finance and invest in industries deemed critical

to U.S. national security and economic resilience, including

defense, energy and advanced manufacturing. JPMorgan, Goldman

Sachs, Citigroup and Wells Fargo report today, kicking off a

season that doubles as a macro proxy while official releases are

delayed. Investors will parse net interest income resilience,

the market's rebound and any tariff or shutdown dents to

activity, with consensus pointing to high-single-digit S&P 500

earnings growth.

* Japan stumbles: The Nikkei fell as much as 3% and the yen

firmed

after Japan's finance chief flagged the need for a new strategy

that addresses inflation, adding to political uncertainty

already weighing on risk appetite. With BOJ policy expectations

and leadership cross-currents in the mix, Japan's equity

volatility is bleeding into broader Asia risk.

In today's column, I discuss whether gold's parabolic surge is

becoming the bubble investors think they're hedging against.

Today's Market Minute

* Hamas freed the last living Israeli hostages from Gaza on

Monday under a ceasefire deal and Israel sent home busloads of

Palestinian detainees, as U.S. President Donald Trump declared

the end of the two-year-long war that has upended the broader

Middle East.

* The United States and China on Tuesday will begin charging

additional port fees on ocean shipping firms that move

everything from holiday toys to crude oil, making the high seas

a key front in the trade war between the world's two largest

economies.

* Google will invest $15 billion over the next five years to set

up data centre capacity for an artificial intelligence hub in

India's Andhra Pradesh, the company said on Tuesday, marking one

of its biggest ever investments in the country.

* The U.S. dollar just notched up its best week in two months, a

move many would dismiss as a short-term bounce in a longer-term

decline, especially with lower U.S. interest rates on the

horizon. But, writes ROI markets columnist Jamie McGeever, the

bull case for the tarnished greenback is surprisingly

persuasive.

* The UK stock market has become one of the top contrarian

trades after the recent Bank of America survey reported a record

number of fund managers underweight the British market. There

are plenty of reasons to think that UK equities could outperform

their U.S. counterparts in 2026 and potentially for the next

decade - and this optimism does not rest solely on Britain's

cheap valuations. Read more in Panmure Liberum investment

strategist Joachim Klement's latest piece for ROI.

Chart of the day

The AI boom ignited by ChatGPT's launch in late 2022 has

continued to fuel staggering capital outlays and data center

expansion despite a brief crisis of confidence sparked by

China's cheaper DeepSeek model and periodic market concerns over

Trump's tariff policies. Citigroup last month raised its

forecast for AI-related infrastructure spending by tech giants

to surpass $2.8 trillion through 2029, from $2.3 trillion

estimated earlier, citing aggressive early investments by

hyperscalers and growing enterprise appetite.

Today's events to watch (all times EDT)

* U.S. NFIB small business survey for September (6:00 AM

EDT); Canada August building permits

* Federal Reserve Chair Jerome Powell speaks (12:20 PM EDT)

in Philadelphia, Fed Board Governor Christopher Waller speaks in

Washington, Boston Fed President Susan Collins speaks in Boston;

European Central Bank policymakers François Villeroy de Galhau

and Sharon Donnery speak in New York; Bank of England

policymaker Alan Taylor speaks in London

* The International Monetary Fund releases World Economic

Outlook (9:00 AM EDT) as IMF-World Bank meetings get underway in

Washington. Speakers at the IMF meeting include Federal Reserve

Vice Chair for Supervision Michelle Bowman, European Central

Bank President Christine Lagarde, Irish Central Bank Governor

Gabriel Makhlouf

* French Prime Minister Sebastien Lecornu addresses

parliament to spell out his budget priorities (8:00 AM EDT)

* U.S. corporate earnings: JPMorgan, Goldman Sachs,

Citigroup, BlackRock, Wells Fargo, Johnson & Johnson, Domino's

Pizza

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