1. Inflation came in as expected but 4.2% is a lot higher than the 2% goal.

However, the May inflation report gave the Fed one more reason to sit still next week as oil prices did most of the damage.
Outside of gas prices, there was not a ton of worry in the market that the higher headline inflation is permanent.
"I'm watching the data very carefully to make sure that the inflation that we've seen recently does not get embedded into higher, more persistent inflation," John Williams, New York Fed president, told Yahoo Finance last week.

That’s quite a different approach from a panicking ECB, that will probably raise rates today, a potential policy error that will complicate economic growth.

Market expectations are now pricing a 51.6% probability that the Fed will increase interest rates at its two-day meeting on October 28.

2. Lower gold.

While gold is seen as a hedge against inflation, higher rates tend to weigh on the non-yielding metal.
"We're seeing a kind of readjustment broadly in what global central banks are going to do, and there's been a major hawkish shift."
"If we can break the $4,100 level, I think the path of resistance fundamentally changes for gold, and we might be starting to look at $3,500 as the next level into the end of the year”.

3. AI servers are becoming memory systems.

4. Meta ties up with Reliance for AI data centers in India.

Reliance will build a data center with 168 MW capacity in Jamnagar, Gujarat, which Meta will lease, with options to scale, according to the statement.
India is catching up with the world on AI infrastructure and the diffusion of energy and AI markets is set to make Reliance standout as it ramps up its investments.
Reliance Industries is one of the few Indian companies that we can buy directly in Europe via a secondar listing in Euro’s.
It’s rated “top pick” at Morgan Stanley with an upside of 42%.
The stock is down year-to-date on higher oil prices.

5. Outflow from Asian equities.

Asian equities are witnessing a surge in foreign outflows in June with the pullback in AI-linked technology stocks.
However, the pullback is a normal consequence of the concentration risk in AI stocks, since global equity funds have to rebalance their holdings.
"Despite renewed anxiety over rates, equity issuance, and geopolitics, we expect the rally to resume," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
"Although tech stocks have come under pressure in recent days amid concerns about whether expectations can be met, business fundamentals remain strong."

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