MPC Morning Call 9th September – Chip Stocks higher as investors focus on anything but the economy

Overnight – Chip Stocks higher as investors focus on anything but the economy

Tech stocks jumped to a closing record high Monday powered by chip stocks as investors awaited key inflation data due later this week, in a classic “head in the sand” move after Fridays US employment data

Chipmakers dominated market headlines as shares of NVIDIA and Broadcom rose, with the latter extending its rally following strong earnings and an optimistic AI-driven outlook. Analysts at UBS projected continued earnings growth for Broadcom into 2026 and 2027, highlighting the robust long-term demand for AI technologies. Meanwhile, Alibaba gained over 4% after leading a $100 million funding round for Chinese humanoid robotics startup X Square Robot, underscoring continued momentum in the AI and robotics space.

Investors are now turning their attention to U.S. inflation data, particularly the August consumer price index, expected to reveal a modest acceleration in price growth to 2.9% from 2.7% in July. Analysts note that the effects of Trump’s recently enacted tariffs are likely to show up in import costs and could fuel inflation further. While this week’s CPI and producer price index reports may not directly impact the Federal Reserve’s September rate decision, policymakers have warned that rising price pressures linked to tariffs could delay future interest rate cuts.

On the political front, France’s government suffered another collapse after Prime Minister Francois Bayrou lost a confidence vote, forcing President Emmanuel Macron to weigh whether to hold a new snap election or appoint a replacement. Concerns are growing over France’s surging debt burden, especially with 30-year bond yields hitting decade highs. In Japan, Prime Minister Shigeru Ishiba announced his resignation shortly after striking a trade deal with the U.S., leaving a power vacuum within the ruling Liberal Democratic Party. His sudden departure raises the likelihood of fresh political uncertainty in Japan, particularly in the wake of his party’s recent electoral defeat.