U.S. markets saw a strong rebound as dip-buyers fueled optimism over the continued bull run in equities. The S&P 500 hit new highs, driven by an AI-fueled tech rally, even as investors remained cautious about the broader economic landscape.The Fed’s minutes from its September meeting indicated a potential for further interest rate cuts, though inflation concerns are causing some caution. A looming government shutdown and growing U.S. fiscal pressures, highlighted by a record $1.8 trillion budget deficit, keep investors on edge. Meanwhile, gold prices surged past $4,000, reflecting mounting concerns over the U.S. economy and political gridlock.In Washington, the ongoing fiscal struggle has raised doubts about the effectiveness of recent tariff policies, which have failed to significantly reduce the nation’s debt, despite initial promises. The situation worsened as corporate income tax receipts dropped by 15% YoY, showing that recent legislative moves are not generating the expected returns.In Europe, political and trade dynamics are in flux. French President Macron is expected to announce a new prime minister soon, in a move aimed at stabilizing the political situation and avoiding a snap election that could deepen existing chaos.Meanwhile, U.S. trade demands are raising concerns in the EU, with some officials warning that new requests could undermine the bloc’s regulatory autonomy and potentially derail the trade agreements reached earlier with Washington. This sentiment is growing as the EU also grapples with the possible fallout from regulatory changes affecting digital, tech, and climate legislation.On the economy side, Germany raised its 2025 growth forecast to 0.2%, signaling a recovery boosted by fiscal stimulus, though the outlook for 2026 remains modest. The BoE also expressed concern over high valuations in the AI sector, suggesting that a sharp market correction could be on the horizon, adding to broader uncertainty in European markets.In Asia, China’s stock market is set to resume trading amid speculation that the AI narrative might drive market strength, despite weak consumer activity during the National Day holiday. UBS analysts predict that China will continue to focus on technological self-reliance, with a GDP growth target of 4.5%-5% for the upcoming period. However, consumer price indices in Taiwan have shown the slowest growth since March 2021, underscoring the region’s struggle to generate inflationary momentum.Japan, meanwhile, faces currency pressures as the JPY hits an eight-month low against the USD, raising concerns that Japanese authorities may intervene. In other parts of the region, Thailand’s Prime Minister dismissed the idea of Donald Trump mediating peace talks with Cambodia, emphasizing regional autonomy over foreign involvement.In Australia, Prime Minister Anutin Charnvirakul’s stance contrasts with rising regional defense discussions, particularly with Singapore, as both nations work to strengthen their military ties.Australia’s economic outlook faces mixed signals, with the RBA cutting interest rates more aggressively than expected, leading to a six-month low for the NZD. The RBNZ has also indicated openness to further rate reductions as concerns mount about slowing economic growth. Despite these challenges, Australia’s equity markets are poised to open higher, with a firm start anticipated in the ASX, driven by favorable local consumer inflation expectations.In the Middle East, Saudi Arabia is eyeing a rare $10 billion loan deal as part of its ongoing efforts to finance its diversification plans, though market conditions will ultimately determine whether the deal proceeds. Meanwhile, geopolitical tensions in Gaza could be easing, with a peace deal between Israel and Hamas seemingly within reach. Former U.S. President Donald Trump hinted that a major breakthrough could come soon, though official confirmation is still pending.Despite a strong start to the week for global equities, ongoing geopolitical risks; ranging from U.S.-China tensions to potential Middle Eastern peace deals; continue to loom large over market sentiment. Investors are advised to stay alert to key developments in political arenas, as well as economic reports that may signal shifts in monetary policy. The coming days will be pivotal in setting the tone for the rest of the quarter, particularly with central bank decisions and fiscal policies playing an outsized role in shaping global market trends.