Tech Stocks Rally, AI Competition Escalates, and Inflation Rebounds
Source: Kapitales Research
US Markets: Wall Street Extends Gains as Rate-Cut Anticipation Builds
US equities advanced further, with investors increasingly pricing in a December rate cut as recent commentary from Federal Reserve officials signalled a growing openness to easing. Futures markets now imply an ~83% probability of a policy cut.
Nvidia and Dell both outperformed on optimism around AI-related server demand, while Urban Outfitters surged on stronger-than-expected earnings.
Globally, equity sentiment was similarly constructive, with indices across Europe and Asia posting solid gains ahead of the Thanksgiving market pause.
CPI Rose 3.8% in the Year to October 2025
Australia’s Consumer Price Index rose 3.8% YoY in October, up from 3.6% in September, marking continued firming in underlying inflation pressures as the ABS transitions fully to a monthly CPI series. Housing remained the dominant driver, rising 5.9%, with electricity prices jumping 37.1% as government rebates phased out across multiple states.
Services inflation accelerated to 3.9%, led by rents, medical services, and domestic travel, while food inflation remained steady at 3.2%, supported by higher meat, fruit, and meal-out costs. Trimmed-mean inflation ticked up to 3.3%, signalling persistent broad-based price momentum even after adjusting for one-off electricity rebate effects.
The data suggests inflation progress remains uneven, with services and energy sectors continuing to exert upward pressure. This may complicate the Reserve Bank of Australia’s forward-guidance messaging as it navigates a delicate balance between easing cost-of-living pressures and preserving policy credibility.
Hyperscalers Race for AI Dominance: Google’s TPU Push Challenges Nvidia’s GPU Reign
Nvidia shares declined after reports indicated Meta may shift to Google’s TPUs for future AI workloads, potentially beginning as early as 2027. Alphabet stock rallied sharply on rising investor confidence in Google’s AI hardware strategy and the successful launch of Gemini 3; its latest flagship model trained entirely on its own chips.
Nvidia quickly responded, asserting that its Blackwell GPU architecture remains a full generation ahead of competing AI ASICs and emphasised its versatility across training and inference. The company highlighted that Google continues to purchase Nvidia products and that its platform supports every major AI model.
For Google, attention on TPUs is mounting as cloud clients explore alternatives to Nvidia’s supply-constrained and premium-priced GPUs. A potential multibillion-dollar Meta partnership would significantly deepen Google’s footprint in enterprise AI compute, supporting its broader strategy of diversifying cloud revenue.
The intensifying competition signals a structural shift in AI infrastructure spending patterns, with hyperscalers seeking greater supply chain control as model sizes scale and compute demand accelerates.
Source: TradingView, Analysis by Kapitales Research
Conclusion
Global market sentiment is being shaped by three influential forces that investors must monitor closely heading into early 2026. In the United States, rising confidence in near-term rate cuts continues to support equity markets, particularly growth and technology sectors poised to benefit from lower financing costs.
Meanwhile, Australia’s inflation profile remains stickier than expected, with persistent price pressures in housing, energy, and services potentially complicating policy decisions and influencing regional risk appetite. The competitive dynamics within the AI semiconductor industry are intensifying as Google and Nvidia accelerate innovation and scale their capabilities, signalling a shift in how hyperscalers allocate capital toward compute infrastructure. These combined factors are likely to drive volatility but also create selective opportunities, making it essential for investors to track inflation trends, corporate earnings resilience, and long-term technology investment cycles.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Disclosure: The information mentioned above has been sourced from the company reports and a third-party database, i.e. Koyfin. Investors are advised to use strict stop-loss to protect their investments in case of any unfavorable/uncertain market events.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au.au
Daily Dose of Buy, Sell & Hold recommendations before the market opens.
Tech Stocks Rally, AI Competition Escalates, and Inflation Rebounds
US Markets: Wall Street Extends Gains as Rate-Cut Anticipation Builds
US equities advanced further, with investors increasingly pricing in a December rate cut as recent commentary from Federal Reserve officials signalled a growing openness to easing. Futures markets now imply an ~83% probability of a policy cut.
Nvidia and Dell both outperformed on optimism around AI-related server demand, while Urban Outfitters surged on stronger-than-expected earnings.
Globally, equity sentiment was similarly constructive, with indices across Europe and Asia posting solid gains ahead of the Thanksgiving market pause.
CPI Rose 3.8% in the Year to October 2025
Australia’s Consumer Price Index rose 3.8% YoY in October, up from 3.6% in September, marking continued firming in underlying inflation pressures as the ABS transitions fully to a monthly CPI series. Housing remained the dominant driver, rising 5.9%, with electricity prices jumping 37.1% as government rebates phased out across multiple states.
Services inflation accelerated to 3.9%, led by rents, medical services, and domestic travel, while food inflation remained steady at 3.2%, supported by higher meat, fruit, and meal-out costs. Trimmed-mean inflation ticked up to 3.3%, signalling persistent broad-based price momentum even after adjusting for one-off electricity rebate effects.
The data suggests inflation progress remains uneven, with services and energy sectors continuing to exert upward pressure. This may complicate the Reserve Bank of Australia’s forward-guidance messaging as it navigates a delicate balance between easing cost-of-living pressures and preserving policy credibility.
Nvidia shares declined after reports indicated Meta may shift to Google’s TPUs for future AI workloads, potentially beginning as early as 2027. Alphabet stock rallied sharply on rising investor confidence in Google’s AI hardware strategy and the successful launch of Gemini 3; its latest flagship model trained entirely on its own chips.
Nvidia quickly responded, asserting that its Blackwell GPU architecture remains a full generation ahead of competing AI ASICs and emphasised its versatility across training and inference. The company highlighted that Google continues to purchase Nvidia products and that its platform supports every major AI model.
For Google, attention on TPUs is mounting as cloud clients explore alternatives to Nvidia’s supply-constrained and premium-priced GPUs. A potential multibillion-dollar Meta partnership would significantly deepen Google’s footprint in enterprise AI compute, supporting its broader strategy of diversifying cloud revenue.
The intensifying competition signals a structural shift in AI infrastructure spending patterns, with hyperscalers seeking greater supply chain control as model sizes scale and compute demand accelerates.
Source: TradingView, Analysis by Kapitales Research
Conclusion
Global market sentiment is being shaped by three influential forces that investors must monitor closely heading into early 2026. In the United States, rising confidence in near-term rate cuts continues to support equity markets, particularly growth and technology sectors poised to benefit from lower financing costs.
Meanwhile, Australia’s inflation profile remains stickier than expected, with persistent price pressures in housing, energy, and services potentially complicating policy decisions and influencing regional risk appetite. The competitive dynamics within the AI semiconductor industry are intensifying as Google and Nvidia accelerate innovation and scale their capabilities, signalling a shift in how hyperscalers allocate capital toward compute infrastructure. These combined factors are likely to drive volatility but also create selective opportunities, making it essential for investors to track inflation trends, corporate earnings resilience, and long-term technology investment cycles.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Disclosure: The information mentioned above has been sourced from the company reports and a third-party database, i.e. Koyfin. Investors are advised to use strict stop-loss to protect their investments in case of any unfavorable/uncertain market events.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au.au