CNBC Daily Open: Takaichi's victory sends Japan's Nikkei 225 to new highs

Japan's Sanae Takaichi and her ruling Liberal Democratic Party secured an overwhelming mandate in Sunday's election, sweeping a supermajority — which means the LDP holds two-thirds or more seats in the Lower House — and ushering her back as the country's prime minister.

The outcome gives Takaichi broad latitude to pursue her agenda, which includes boosting spending and suspending some food-related taxes. Japanese stocks climbed to a record high Monday, while the yen strengthened to 156.88 per dollar, reflecting renewed investor confidence following the election results.

That optimism follows a sharp rebound in U.S. markets on Friday, when tech stocks such as Nvidia, Broadcom, and Oracle led the charge.

"We're in a gold rush right now with AI," said Falcon Wealth Planning founder Gabriel Shahin. "There is money that will be deployed ... It's just the carousel [of money movement] sometimes scares people."

The rally pushed major benchmarks higher. The Dow Jones Industrial Average popped 2.47% to close above 50,000 for the first time. The S&P 500 rallied 1.97% — putting it back in the green for 2026 after it dipped into negative territory after Thursday's close — while the Nasdaq Composite climbed 2.18%.

Over in Europe, Italian bank UniCredit posted its best-ever annual net profit of 10.6 billion euros ($12.6 billion) in 2025, helped by its stakes in Commerzbank and Alpha Bank. The lender also raised its estimates for revenue and profits this year. Find out more as CEO Andrea Orcel discusses the bank's earnings on "Squawk Box Europe."

Meanwhile, political pressures continued to build on U.K. Prime Minister Keir Starmer. His chief of staff, Morgan McSweeney, quit on Sunday, to take responsibility for advising Starmer to appoint Peter Mandelson as ambassador to the U.S. — despite Mandelson's past links to sex offender Jeffrey Epstein.

With Starmer's public approval slipping, some members of his Labour Party are openly questioning his political future — a far cry from the unifying force Japan's Takaichi demonstrated on Sunday.

Big Tech has lost more than $1 trillion in valuation collectively over the past week, according to FactSet data. The declines hit Amazon, Microsoft, Nvidia, Meta, Google and Oracle. Amazon alone lost over $300 billion in market cap.

Silicon Valley's biggest names have been found in files related to sex criminal Jeffrey Epstein that were recently released by the U.S. Justice Department. Apart from Elon Musk and Bill Gates, the names include Google co-founder Sergey Brin, venture capitalist Peter Thiel and LinkedIn co-founder Reid Hoffman.

Jimmy Lai was sentenced to 20 years in prison on Monday, in one of the most prominent prosecutions under a China-imposed national security law. The media tycoon, who founded pro-democracy newspaper Apple Daily, was convicted in December for collusion with foreign forces, among other charges.

The Dow closes above 50,000 for the first time. Major U.S. indexes jumped on Friday as tech stocks rebounded. Asia-Pacific markets broadly rose Monday. Japan's Nikkei 225 crossed the 57,000 level in earlier trading, a first for the index. Chinese chip designer Montage Technology surged about 60% on its debut on the Hong Kong stock exchange.

[PRO] Tech giants sold off in China last week. However, the reasons behind the moves differ from those in the U.S., analysts said.

Private credit worries resurface in $3 trillion market as AI pressures software firms

Private credit markets are facing fresh uncertainty as AI-driven tools start to pressure software companies, a major borrower group for private lenders. Shares of asset managers with large private credit franchises tumbled last week as investors fretted about how AI could upend borrowers' business models, pressure cash flows and ultimately lift default risks.

The moves bring to fore a growing unease around the private credit market. It now has to brace for the impact from AI-driven disruption to the software sector, which is heavily exposed to buyouts financed with opaque, illiquid loans, according to market watchers.

— Lee Ying Shan