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Andrew Gillham, of Team Asset Management, offers this week’s review of global markets

US stocks extended their rally to hit new record highs as optimism in the artificial intelligence and semiconductor sectors more than offset concerns over a government shutdown and a sudden political crisis in France. The blue-chip S&P 500 and technology-focused Nasdaq indices gained 1.2% and 1.6% respectively.

Shares in chipmaker Advanced Micro Devices (AMD) jumped more than 23% on Monday after it announced that it had signed a multibillion-dollar deal with Open-AI, the creator of ChatGPT, to build AI infrastructure over multiple years. The gains increased AMD’s market capitalisation to $330 billion, valuing the company higher than Coca-Cola, General Electric and Chevron. As part of the deal, Open AI can buy up to 160 million shares in AMD at one cent apiece.

OpenAI will deploy six gigawatts worth of AMD’s AI graphics-processing units beginning in the second half of next year. To give that some context, six gigawatts equates to the energy use of five-million American households – or three times the annual electricity production of Hoover Dam.

The deal comes hot on the heels of an even larger agreement between OpenAI and AMD’s rival Nvidia. The $4.5 trillion chip giant will invest up to $100 billion in OpenAI and build at least ten gigawatts of AI data centres in a strategic partnership.

Closer to home, the FTSE 100 also hit a new record high of just shy of 9,500, boosted by the stellar performance of AstraZeneca, the largest constituent in the index. Shares in the pharmaceutical giant rose more than 11% last Wednesday after US President Donald Trump announced a government-run website enabling consumers to buy drugs directly from manufacturers, easing earlier concerns over potential tariffs on pharmaceutical imports. AstraZeneca generates almost half of its revenue in the US. Other European drugmakers, including Roche (+9%) and Sanofi (+8%) also posted strong gains on the announcement.

AstraZeneca, headquartered in Cambridge, also announced that it will list its shares directly on the New York Stock Exchange to enable it to “reach a broader mix of global investors”, including the very wealthy US pension funds. Although it will retain a listing on the London Stock Exchange, the move is expected to cost the UK up to £200 million per year in lost stamp duty.

As expected, the US federal government partially shutdown at 12.01 am Eastern Daylight Time on 1 October, the eleventh shutdown in modern US history and the first since the 35-day shutdown from December 2018 to January 2019 during the first Trump administration.

The impasse follows Congress’s failure to pass legislation for fiscal year 2026, with the president labelling it a “Democrat shutdown” and directing agencies to prepare for thousands of layoffs. Meanwhile, leading Democrats, including Senate Minority Leader Chuck Schumer, accused the Republicans of “bullying” and refusing to act in good faith.

Key sticking points include White House demands for spending cuts and the elimination of enhanced Affordable Care Act (“Obamacare”) subsidies that are due to lapse at the end of the year.

Most non-essential departments have been shuttered, including the Bureau of Labor Statistics, which meant that the monthly nonfarm payrolls report couldn’t be released on Friday afternoon.

While events in Washington were expected, the collapse of France’s minority government on Monday morning was a surprise. Newly appointed Prime Minister Sébastien Lecornu resigned less than a month after his appointment after a backlash against the new cabinet announced by President Emmanuel Macron a day earlier.

Politicians on both sides of the political spectrum were furious that most senior members from previous cabinets remained, including Lecornu’s allies in the conservative Les Républicains party. Lecornu’s departure deepens France’s political crisis at a time the government is under pressure to tackle fiscal deficit, which, at 5.4% of GDP, is the highest in the Eurozone. French stocks and government bonds sold off sharply on the news.

In commodity markets, precious metals, including gold and silver, continued their remarkable rally on the back of last week’s political uncertainties. Gold has risen more than 50% so far this year to a record $3,960 an ounce, and silver, which is also used for industrial purposes, has gained 66% to just shy of its peak. Brent Crude, however, slipped 4% to $65 a barrel after the OPEC+ cartel revealed a plan to increase output by 137,000 per day in November.