October 7, 2025 — Global markets on Monday were dominated by two key events: the sudden resignation of France’s Prime Minister, which sparked a political crisis, and a blockbuster deal between AMD and OpenAI that fueled a rally in tech stocks. European markets suffered a sharp selloff in both equities and bonds, with France’s CAC 40 Index dropping more than 2% intraday. In contrast, U.S. tech shares surged, led by AMD’s nearly 40% jump, while safe-haven demand sent gold prices to record highs above $3,940.
Europe: French Political Turmoil Becomes the Latest Black Swan
French Prime Minister Gabriel Attal resigned just three weeks after taking office, marking the fifth change in leadership in less than two years. The move signaled a breakdown in President Macron’s efforts to push through the 2026 budget plan and deepened political gridlock.
The CAC 40 Index slid as much as 2.1%, with bank stocks leading the decline. Société Générale, Crédit Agricole, and BNP Paribas all dropped sharply.
France’s 10-year government bond yield jumped 11 basis points to 3.61%, while the yield spread between French and German 10-year bonds widened to 89 basis points — the highest since January.
The euro fell about 0.8% against the dollar to 1.1675, a one-week low.
U.S. Market: Tech Stocks Take the Lead, AMD Steals the Show
The S&P 500 and Nasdaq opened higher, while the Dow turned negative. If the rally holds, the S&P 500 will log its seventh consecutive gain.
AMD shares soared as much as 37.7% at the open before paring gains to below 30%. The company announced a major deal with OpenAI involving up to 6GW of computing power in chips.
Nvidia initially fell 2.3% but later trimmed losses to about 1%. The Philadelphia Semiconductor Index gained more than 4.5% in early trading.
Explosive AI computing demand and OpenAI’s $500 billion valuation boosted sentiment across the AI supply chain.
Asia-Pacific: “Sanae Takaichi Trade” Dominates Japanese Assets
Sanae Takaichi’s victory in the Liberal Democratic Party leadership race raised expectations of a return to “Abenomics.” Markets are betting that the Bank of Japan is less likely to raise rates this month.
The Nikkei 225 Index jumped 4.8%, hitting a record high.
The U.S. dollar rose 2% against the yen to 150.50, the highest since early August.
Japan’s 10-year government bond yield climbed to 1.70%, the highest since 2008, while the 30-year yield hit an all-time high of 3.30%.
Commodities: Safe-Haven Demand Lifts Gold
Gold performance: Spot gold surged past $3,940 per ounce, up 1.38% on the day and more than 50% year-to-date.
Drivers: Ongoing geopolitical risks (French political turmoil) combined with continued expectations of monetary easing supported gold prices.
Today’s focus
Fed’s Bostic speaks on the economic outlook
Fed Governor Milan participates in a fireside chat
Fed’s Kashkari gives remarks
Germany’s August industrial production (MoM, seasonally adjusted)
U.S. EIA crude oil inventories for the week ending October 3
Developments in the French political crisis
Progress of the U.S. government shutdown (Day 7)
