Volkswacht Bodensee - Stock markets diverge despite boost from AI deals

Trading on the first business day in November began on the front foot after an upbeat end to October that saw easing China-US tensions, a cut to US interest rates and healthy earnings from market darlings including technology giant Amazon.

"Tech and AI remain a huge theme for investors as we move into the final months of the year," said Kathleen Brooks, research director at trading group XTB.

However early gains in Europe and Wall Street faded.

Data showed economic activity in the US manufacturing sector contracted at a faster rate in October, when analysts had been expecting it to stabilise or even expand.

Nevertheless the tech-heavy Nasdaq Composite was still higher in late morning trading thanks to blockbuster tech deals.

Shares in Amazon jumped 4.5 percent after ChatGPT-maker OpenAI signed a $38 billion deal with Amazon's AWS cloud computing arm.

The deal will give OpenAI, which is partly owned by AWS's arch-rival Microsoft, access to computing resources including hundreds of thousands of state-of-the-art Nvidia GPU chips, the crucial component of the generative artificial intelligence revolution.

Microsoft announced $15.2 billion in investments in artificial intelligence and cloud computing in the United Arab Emirates.

The deal sent Nvidia shares up 2.8 percent, buoyed by hopes it could see access for its most advanced chips expand to more markets as the Trump administration allowed the supply of GPU chips to the UAE.

Shares in Nvidia are up just over 50 percent since the start of the year.

Shares in Microsoft added 0.2 percent.

"A degree of tiredness is creeping into Wall Street's mood despite the strong performance thus far in earnings season," and blockbuster AI deals, said Chris Beauchamp, chief market analyst at investing and trading platform IG.

"As volatility rises once again, it looks like stocks could be in for a bumpier ride," he added.

In Europe, Frankfurt managed to end the day in the green, with sentiment boosted by the government's intention to push forward next year with subsidised electricity for heavy industry.

Shares in European carmakers raced higher after China said on Saturday it would exempt some Nexperia chips from an export ban that was imposed over a row with Dutch authorities.

Anxiety over chip shortages began when the Netherlands invoked a Cold War-era law in late September to effectively take control of Nexperia, whose parent company Wingtech is backed by the Chinese government.

Shares in German automaker Volkswagen gained two percent, while rival Mercedes-Benz rose 1.8 percent.

Shares in global automaker Stellantis, which has European brands Peugeot, Fiat and Citroen in its stable, rose by 0.6 percent in Paris.

Shares in Ryanair climbed 4.7 percent after the no-frills airline announced a 20-percent gain in quarterly profit on the back of increased ticket prices.

In Asia, Seoul piled on 2.8 percent, reaching a fresh record high, as investors cheered a thawing of ties between South Korea and China.

Tokyo was closed for a holiday.

Oil prices pushed higher after the OPEC+ alliance announced at the weekend that it would lift output again in December, but then hold production steady in the first quarter of 2026.

- Key figures at around 1630 GMT -

New York - Dow: DOWN 0.3 percent at 47,404.59 points

New York - S&P 500: UP less than 0.1 percent at 6,846.26

New York - Nasdaq Composite: UP 0.4 percent at 23,817.81

London - FTSE 100: DOWN 0.2 percent at 9,701.37 (close)

Paris - CAC 40: DOWN 0.1 percent at 8,109.79 (close)

Frankfurt - DAX: UP 0.7 percent at 24,132.41 (close)

Hong Kong - Hang Seng Index: UP 1.0 percent at 26,158.36 (close)

Shanghai - Composite: UP 0.6 percent at 3,976.52 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: UP at $1.1531 from $1.1527 on Friday

Pound/dollar: UP at $1.3150 from $1.3139

Dollar/yen: UP at 154.13 yen from 154.11 yen

Euro/pound: DOWN at 87.69 pence from 87.74 pence

Brent North Sea Crude: UP 0.7 percent at $65.24 per barrel

West Texas Intermediate: UP 0.7 percent at $61.42 per barrel

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T.Egger--VB