Key Points

• Alibaba Soars on Cloud Growth and AI Ambitions: Shares jumped 19% in Hong Kong as cloud revenues surged 26% and reports of a new AI chip fueled optimism.
• China’s Export Growth Hits 6-Month Low as U.S. Shipments Collapse: Exports to the U.S. plunged 33% in August, dragging overall growth to its weakest since February.
• OPEC+ Signals Market-Share Push With Modest Output Hike: The group will raise output by 137,000 bpd in October, accelerating the rollback of cuts despite softer demand.
• European Stocks Rise as France Faces Pivotal Confidence Vote: Equities advanced ahead of a confidence vote that could unseat France’s prime minister and add political uncertainty.

Alibaba Soars on Cloud Growth and AI Ambitions

Alibaba’s Hong Kong-listed shares surged 19% Monday, the steepest gain since March, after quarterly results highlighted a 26% revenue jump in its cloud division and reports of a new AI chip under development. While overall revenue of 247.65 billion yuan ($34.7 billion) rose just 2% year-on-year, net income surged 78%, easing concerns over slower topline growth.

Investors welcomed strong momentum in AI-related products—posting triple-digit growth for the eighth straight quarter—and backed the company’s push into instant commerce despite pressure on margins. The rally extended a 13% rise in Alibaba’s New York shares, underscoring renewed confidence in its strategic pivot.

China’s Export Growth Hits 6-Month Low as U.S. Shipments Collapse

China’s exports rose 4.4% in August, the weakest pace since February and below expectations, as shipments to the U.S. plunged 33% under tighter scrutiny of transshipments and fading tariff-truce effects. Imports gained just 1.3%, missing forecasts, underscoring soft domestic demand weighed down by real estate weakness and job insecurity.

While exports to ASEAN, Africa, and the EU surged double digits, the U.S. remains China’s largest single-country market despite sharp declines. With deflationary pressures persisting and producer prices down 2.9% year-on-year, economists expect the PBOC to deliver a modest rate cut next week to cushion faltering trade momentum.

OPEC+ Signals Market-Share Push With Modest Output Hike

OPEC+ agreed Sunday to raise production in October by 137,000 barrels per day, marking a sharp slowdown from recent monthly increases but signaling a strategic shift as Saudi Arabia prioritizes market share over price support. The move accelerates the unwinding of earlier cuts, with a second 1.65 million bpd tranche being rolled back more than a year ahead of schedule.

Oil prices, already down about 15% this year, slipped further with Brent at $65.50 and WTI at $61.87. Analysts warn the real test will come in the fourth quarter as demand softens, leaving Saudi Arabia and the UAE carrying most of the supply boost.

European Stocks Rise as France Faces Pivotal Confidence Vote

European equities opened higher Monday, with the DAX up 0.7% and the CAC 40 gaining 0.4%, as investors awaited a French parliamentary confidence vote that could topple Prime Minister Francois Bayrou. The vote, triggered by disputes over €44 billion in budget cuts, risks ushering in France’s fifth prime minister in less than two years and adds to political uncertainty as Paris seeks to curb deficits still above EU thresholds.

Markets also noted ASML’s €1.3 billion investment in Mistral AI and upcoming U.S. inflation data, which will be critical for shaping expectations of a Federal Reserve rate cut.

Conclusion

Alibaba’s sharp rally highlights renewed investor confidence in China’s technology and AI prospects, even as weakening U.S.-bound exports underscore structural challenges in trade.

OPEC+’s decision to prioritize market share over price stability signals potential headwinds for energy producers as demand softens into year-end.

Meanwhile, Europe’s focus on France’s confidence vote reflects the growing influence of domestic politics on regional stability.

Global markets are navigating a complex mix of corporate momentum, trade pressures, energy policy shifts, and political uncertainty. Together, these developments reinforce the need for investors to balance opportunity with caution across sectors and geographies.

Investment Insights

• Alibaba’s surge underscores investor appetite for Chinese tech leaders leveraging AI and cloud; selective exposure could benefit from continued earnings momentum.
• Weakening U.S.-China trade flows highlight risks in export-reliant sectors, reinforcing the case for diversification toward ASEAN, EU, and Africa-linked growth.
• OPEC+’s output hike signals near-term downside risk for crude prices, suggesting caution on energy equities while monitoring opportunities in refiners and consumers.
• Political instability in France adds European risk premium; investors should track sovereign spreads and focus on resilient sectors less exposed to fiscal volatility.

Economic Calendar