Morning Bid: AI trade gets its Muse

Investor enthusiasm for the AI trade is well and truly back after a strong reception to Meta Platforms' (META.O), opens new tab Muse assistant since its US launch revived optimism, while stalling oil prices also buoyed risk sentiment.

The spotlight will be on a high-stakes meeting between Donald Trump and Xi Jinping later this week, with investors watching for signs the leaders of the world's two largest economies can prevent a further deterioration in relations.

AI will be near the top of the agenda in the wake of ⁠a proposal for a new safety notification mechanism for the two leaders to consider.

Facebook-parent Meta launched Muse, its AI assistant that can autonomously send emails, sell a car and book travel on a person's behalf, two weeks ago in the US and has since seen strong demand and usage.

That helped push chipmakers higher and catapult the tech-heavy Nasdaq (.IXIC), opens new tab to a record high. Asian markets took their cue from Wall Street, with South Korea's Kospi (.KS11), opens new tab rising 1.6% and Taiwan stocks (.TWII), opens new tab gaining about 1%. European futures pointed to a higher open.

The ⁠early signs of success for Muse come in the wake of a series of cascading events over a 10-day stretch that have left the largest AI labs reeling over concerns their creations threaten to break humanity.

Meanwhile, Brent crude futures hovered above $100 per barrel after declining for four straight sessions ⁠on hopes of US-Iran talks after Trump said he would be open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the UN General Assembly.

Attention ⁠will also be on French markets as investors confront concerns about the country's long-term finances. The cost of insuring French government debt against the risk of a default jumped ⁠to the highest since March 2020 on Monday, with French bonds, or OATs, the worst-performing major-economy bonds in 2026.

Key developments that could influence markets on Tuesday:

-Euro zone consumer confidence for September

-Kingfisher Plc (KGF.L), opens new tab earnings

By Ankur Banerjee in Singapore; Editing by Jamie Freed

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