U.S. stocks' gains in October owe much to AI

In a surprising twist for traders betting against the S&P 500, the index finished October with a 2.3% gain, defying the so-called 'Octoberphobia' that has haunted markets since historic crashes in 1929 and 1987. The Nasdaq Composite outperformed, soaring by 4.7%, showcasing the robust performance of the technology sector. A significant catalyst for this upward momentum came from tech giant Amazon, whose shares jumped 9.6% thanks to impressive growth in its cloud services. CEO Andy Jassy highlighted strong demand for artificial intelligence (AI) and core infrastructure, prompting a ripple effect that boosted stocks in the AI space, including Palantir and Oracle. October marked a notable period for Nvidia as well, with the company achieving a groundbreaking $5 trillion valuation. CEO Jensen Huang referred to the burgeoning AI market as creating a 'virtuous cycle' where increased usage fuels further investment and innovation, indicating a dynamic growth trajectory. Big Tech's recent earnings reports revealed significant increases in capital expenditure, primarily aimed at enhancing AI infrastructure. This trend suggests that the excitement surrounding AI is not a fleeting moment but rather a sustained growth opportunity, akin to the lasting energy derived from fiber-rich foods. On the global front, China's manufacturing sector showed signs of cooling, with the General Manufacturing PMI dropping to 50.6, slightly below analysts' expectations. Meanwhile, Baidu's robotaxi service reached a milestone with 250,000 weekly rides, rivaling other industry leaders. In corporate updates, Berkshire Hathaway reported a remarkable 34% year-over-year increase in operating profit for the third quarter, reaching $13.485 billion. The company now boasts a record cash reserve of $381.6 billion but remains cautious about stock buybacks. As markets transition into November, the S&P 500 stands tall, up over 16% for the year. Investors are advised to stay alert for upcoming developments, including a critical Supreme Court case regarding Trump tariffs and earnings reports from key players like Advanced Micro Devices and Palantir. Additionally, South Korea's media landscape saw a boost with a new content exchange agreement with China, rekindling hopes for K-pop's resurgence in the Chinese market, which had been restrained since a 2016 'soft ban'.