Wall Street pointed toward gains early Monday as the U.S. government shutdown dragged into a second week while markets in Japan and France were roiled by unexpected political shake-ups.
Futures for the S&P 500 gained 0.3% while futures for the Dow Jones Industrial Average registered a 0.2% gain. Nasdaq futures climbed 0.7%.
Share of Fifth Third Bancorp dipped 4.7% after the regional bank announced that it is buying Comerica for $10.9 billion in an all-stock
deal that will create the 9th largest U.S. bank. The combined company will have operations in the Southeast, Texas and California, and solidify Fifth Third’s position in the Midwest.
Comerica shares jumped 10.9% before markets opened.
Advanced Micro Devices soared more than 27% after the semiconductor company announced that it will supply its chips to ChatGPT maker OpenAI as part of a deal to team up on artificial intelligence infrastructure. AMD will provide OpenAI with the latest version of its high performance graphics chips expected to debut next year.
An unconfirmed report that U.S. President Donald Trump might be considering ways to reduce the cost of his higher tariffs on auto parts and other materials for U.S. manufacturers helped automakers’ share prices overseas. Toyota Motor Corp.’s shares jumped 4.9% in Tokyo and Honda Motor Co. gained 4.1%.
The shutdown of the U.S. government means fewer economic data releases this week, though markets will have some earnings reports to comb through, including Delta Air Lines, PepsiCo and Levi Strauss.
Despite the shutdown, the Federal Reserve will release minutes from its meeting last month when it cut its benchmark interest rate for the first time this year.
Japan’s Nikkei stock index jumped nearly 5% on Monday to a new record close while shares in France fell back nearly 2% at midday after its prime minister resigned less than a month after taking office.
France's new prime minister, Sébastien Lecornu, resigned just a day after he named his government, drawing a backlash across the political spectrum for his choice of ministers. French politics have been in disarray since President Emmanuel Macron called snap elections last year that produced a deeply fragmented legislature.
In Germany, the DAX rose 0.3% while Britain's FTSE 100 gained 0.2%.
In Asia, Tokyo's Nikkei 225 soared 4.8% to 47,944.76, but the Japanese yen weakened after the ruling Liberal Democratic Party chose ultra-conservative lawmaker Sanae Takaichi as its leader and likely Japan's first woman prime minister.
In intraday trading the Nikkei climbed as high as 48,150.04.
Takaichi, 64, was an ally of the late Prime Minister Shinzo Abe and is expected to carry on with his market-friendly policies since she backed his traditionalist vision for the country. She is almost certain to become prime minister because the LDP has the most seats in the lower house, although not a majority. It chooses the prime minister, and opposition groups are splintered.
The yen slipped against the U.S. dollar on expectations that Takaichi will boost spending, likely adding to inflationary pressures. The dollar rose to 150.31 Japanese yen from 149.33 yen. The euro slipped to $1.1674 from $1.1730.
Investors, especially non-Japanese ones, were pleased, said Neil Newman, head of strategy at Astris Advisory Japan.
“Obviously, investors like what she has been saying and certainly today judging by the number of stocks that moved and which stocks moved, it seems like pretty much led by foreigners so far," Newman said.
Defense-related shares got a big boost, given Takaichi's hawkish stance. Stock in Kawasaki Heavy Industries leaped 9.2% and Mitsubishi Heavy Industries soared 11.1%.
Elsewhere in Asia, Hong Kong's Hang Seng index sank 0.7% to 26,957.77. Markets in mainland China were closed for a holiday. They reopen on Thursday.
Markets were also closed in Taiwan and South Korea, among other places.
In Australia, the S&P/ASX 200 shed 0.1% to 8,981.40.
Markets in mainland China, Taiwan and South Korea were closed for holidays.
In energy trading, U.S. benchmark crude oil gained 51 cents to $61.39 per barrel. Brent crude, the international standard, added 59 cents to $65.12 per barrel.
A group of countries that are part of the OPEC+ alliance of oil-exporting countries agreed during the weekend to a small boost in oil production, citing a steady global economic outlook. That alleviated fears of an oversupply.
