Meta's AI Assistant 'Muse' Lifts Stock 11%, Revives AI Rally

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. Magnificent 7 ETF Returns on Meta 'Muse' Craze

- Key summary: Meta shares jumped 11.4% after its AI assistant Muse topped Apple's App Store free app rankings, and an ETF tracking the Magnificent 7 set a record high for the first time since May. Muse, launched on the 8th, logged 730,000 downloads in five days, outpacing ChatGPT, Claude and Grok, fueling expectations that Meta's massive AI investment could yield a new revenue stream. Intel surged 12% and AMD rose 10%, pushing AMD's market capitalization past $1 trillion for the first time. The Nasdaq Composite gained 2.3% to close at a record high, though the 10-year U.S. Treasury yield stood at 4.962%, leaving rate pressure in place.

2. Korean Retail Investors Shift From Big Tech, Leverage to ETFs

- Key summary: Korean investors concentrated purchases over the past month on ultra-short Treasury, dividend and benchmark-index ETFs rather than individual U.S. stocks. According to the Korea Securities Depository, the top net-bought overseas stock was the iShares 0-3 Month Treasury Bond ETF (SGOV) at $246.59 million (about 340.3 billion won). The Schwab U.S. Dividend Equity ETF (SCHD) and Vanguard S&P 500 ETF (VOO) followed, with ETFs accounting for six of the top 10 holdings. That contrasts with a month earlier, when SOXL, which tracks three times the daily return of a semiconductor index, and growth stocks such as Alphabet ranked near the top. In the domestic ETF market, four of the top five products by retail net buying were U.S. benchmark-index funds, while U.S.-listed ETFs have drawn about 2.084 quadrillion won in net inflows so far this year, already surpassing last year's annual record.

3. High Rates Shorten Corporate Bonds; 'Under Three Years' Share Hits Two-Year High

- Key summary: The share of corporate bonds issued with maturities under three years surged to 41.8% from the 1st to the 21st of this month, topping 40% for the first time in about two years since October 2024. High oil prices and rising rates, coupled with growing uncertainty over the future, have created an aversion to riskier long-dated paper, driven by higher long-term yields amid that uncertainty. The yield on five-year unsecured corporate bonds rated AA- rose to 4.89% on the 21st from 3.79% at the start of the year, while outstanding commercial paper (CP) increased 7.3% to 219 trillion won this month from 204 trillion won at the end of last year. NICE Investors Service said that as shorter maturities increase corporate reliance on refinancing, more companies could face credit crises in the event of a market shock.

4. [Investment Window] Will 1997's 'One and Done' Repeat?

- Key summary: After the U.S. Federal Reserve raised its policy rate by 25 basis points in September, markets turned their attention to whether the increase would end after a single move, as it did in 1997. In 1997, strong information technology investment, productivity gains and fiscal consolidation held down prices, and with the Asian foreign exchange crisis added to the mix, the Fed held rates at 5.50%. Conditions now differ sharply. In its September economic projections, the Fed put fourth-quarter PCE inflation at 3.7%, and the Trump administration carries an accumulated fiscal deficit and the burden of high long-term rates. The writer judged that the base scenario should be the Fed raising rates at least once more before holding for an extended period to confirm a moderating inflation trend.

5. All Three Battery Makers Secured: POSCO Future M (003670) Signs 1 Trillion Won LFP Cathode Deal With SK On

- Key summary: POSCO Future M signed a 1.074 trillion won contract to supply lithium iron phosphate (LFP) cathode materials to SK On. The supply period runs three years from 2027 through 2029, with a possible two-year extension to 2031 by mutual agreement. The deal means POSCO Future M will supply cathode and anode materials to all three domestic battery makers — LG Energy Solution (373220), Samsung SDI (006400) and SK On. With demand for LFP batteries for energy storage systems (ESS) rising on data center expansion for AI, the company plans to convert part of its high-nickel cathode line at its Pohang plant to an LFP line and begin mass production from the end of the year.

6. CATL Shares Waver on Concerns Over Chinese Automaker Defections

- Key summary: Shares of CATL, the world's largest battery maker, plunged 24.04% in September alone, narrowly avoiding a 52-week low. Major automaker customers have moved to diversify their supply chains, with Li Auto investing 2.65 billion yuan to become the second-largest shareholder in Sunwoda and Xiaomi announcing plans to jointly develop batteries with CALB. A 20% plunge in profits at Chinese automakers from January to July this year, driven by weak domestic demand and intensifying price competition, is cited as the backdrop. Still, analysts largely expect CATL's market dominance to hold, given high barriers to entry and the company's expansion into ESS and battery recycling.