What happened in markets
The Australian sharemarket weakened over the week, with the ASX 200 declining 0.8% as rising bond yields, expectations of further RBA tightening and softer economic data weighed on sentiment. The Utilities (-5.2%), Telecommunications (-2.9%) and Energy sectors (-1.4%) were the weakest performers, while Consumer Staples (+0.8%) was one of the few sectors to finish higher as investors favoured defensive areas of the market. Higher interest rates continued to pressure growth and rate-sensitive sectors, particularly technology, financial services and resources. Despite broader weakness in the Technology sector, Megaport (+5.8%) outperformed after expanding its AI data centre partnership network and connectivity footprint.
US sharemarkets advanced over the week, with the S&P 500 gaining 1.2% as strong economic data and continued enthusiasm surrounding artificial intelligence supported investor sentiment. The Information Technology, (+3.1%), Communication Services (+2.2%) and Health Care sectors (+1.7%) led gains, benefitting from strength in semiconductor and AI-related stocks. In contrast, Utilities (-3.1%), Energy (-3.0%) and Financials (-1.6%) lagged as Treasury yields climbed to multi-year highs. Reflecting the strength in the Information Technology sector, Applied Materials (+9.1%) performed strongly amid ongoing demand for semiconductor equipment and AI infrastructure investment.
European sharemarkets posted modest gains over the week, with the STOXX Europe 600 rising 0.5%. The Technology (+2.5%), Retail (+1.9%) and Energy sectors (+1.1%) led gains as improving risk sentiment and continued investment in technology supported markets. In contrast, the Automobiles & Parts (-2.4%), Telecommunications (-1.7%) and Basic Resources sectors (-0.9%) lagged amid concerns around global growth and softer commodity prices. Rising bond yields and ongoing uncertainty around central bank policy continued to influence sector performance. Reflecting weaker consumer sentiment, Monster Beverage (-3.6%) declined as profit-taking, valuation concerns and increased competition weighed on the share price.
Stock & sector movements
What caught our eye
Meta’s Muse
Meta shares rose 11.4% last Monday, their strongest single day since April 2025, after its new Muse assistant reached the top of the US app charts within days of launch. The move added roughly US$192 billion to the company's market value and left the shares up around 32% for September so far, on track for their best month since 2013. It also marks a shift in how the market is thinking about Meta's enormous spending on artificial intelligence.
For around two years, investors have funded Meta's AI ambitions largely on faith. Tens of billions of dollars went into data centres and chips. Each quarter, the capital spending guidance rose while the products stayed largely out of sight. The shares fell after the July results for exactly that reason. Muse changes the picture because it is a product whose adoption can be observed. It launched in the US earlier this month as a personal agent, rather than a chatbot, carrying out tasks such as filling in forms, booking travel and completing purchases on a user's behalf. Within two weeks, it had passed 2.8 million US downloads and around 557,000 daily users, a faster start than ChatGPT managed.
The promise of economic agents is significant. Plus, the single most persistent investor concern about Meta has long been its dependence on advertising, which makes up over 95% of its revenue. Muse offers the first plausible revenue line outside advertising, through paid plans at US$20 and US$100 a month and, according to founder and CEO Mark Zuckerberg, a small cut of transactions the agent completes. Brokers responded quickly by raising price targets for the stock.
We’re not convinced just yet. Even the bullish brokers do not expect material revenue from Muse before 2028, and Meta itself has said most users should be able to do what they need within the free tier. Muse’s underlying model still trails the leading models from OpenAI, Google and Anthropic, which may limit its pricing power. Shopify and Instacart have plugged Muse into their checkouts, while Amazon and the insurance marketplace Insurify have blocked the agent altogether. Paid conversion and merchant partnerships will be critical, and neither will be clear for some time.
The broader lesson for investors may be about the AI ecosystem rather than Meta alone. On the same day, Meta rose 11.4%, AMD gained about 10%, Intel 12% and Arm 17%. In the other direction, brokerages Charles Schwab and LPL Financial fell 6.1% and 7.5% on fears that an agent able to move cash to the best available rate could erode customer inertia. Meanwhile, brokers now see Google’s search revenue as exposed, since Muse runs on Bing and could draw searches away from Google.
An agent that runs continuously in the cloud consumes far more computing power than a chatbot answering a single question. If Meta’s Muse succeeds, it opens the door to more agentic commerce products, a clear signal for increased AI infrastructure demand. Hence, the more durable beneficiaries of an agentic era may sit in the chips and data centres that every agent, Meta’s or otherwise, will need. Meanwhile, the businesses most at risk may be those that depend on customers not shopping around.
This week, markets will focus on the RBA interest rate decision on Tuesday, with expectations of another 0.25% rate rise. Attention will then turn to Australia's annual CPI data on Wednesday, which may provide clues on future monetary policy. Globally, key releases include UK GDP data, Eurozone inflation figures, and the US September Non-Farm Payrolls report, which will offer further insight into economic growth, inflation trends, and labour market conditions.