Futures tracking the S&P 500 and the Nasdaq rose to record highs on Thursday as Nvidia’s shares jumped, while investors watched developments around the high-stakes U.S.-China summit and awaited economic data.
Nvidia rose 1.9 per cent in premarket trading, giving the chipmaker a market valuation of US$5.9-trillion, after Reuters reported citing sources that the U.S. has cleared about 10 Chinese firms to buy its second-most powerful AI chip, the H200.
A steady rally in technology stocks in recent weeks, particularly chipmakers, has helped pushed U.S. stocks to new highs despite lingering concerns about the Middle East conflict and higher inflation due to surging oil prices.
Chinese President Xi Jinping told President Donald Trump at the start of a two-day summit on Thursday that trade talks were making progress, but warned that tensions over Taiwan could put relations on a dangerous path and even risk conflict.
Trump’s visit also comes against the backdrop of the war with Iran, with the president expected to seek Beijing’s help in ending the costly conflict that has sent global energy prices surging.
At 5:46 a.m. ET, Dow E-minis were up 215 points, or 0.43 per cent, and S&P 500 E-minis were up 11.25 points, or 0.15 per cent. Nasdaq 100 E-minis were up 30.5 points, or 0.1 per cent.
The S&P 500 and the Nasdaq advanced on Wednesday, notching another record close in a recent run to all-time highs, as strength in AI-linked technology shares helped investors look past hotter-than-expected producer prices data.
This week’s stronger consumer prices and producer prices readings have reinforced expectations that the Federal Reserve will keep monetary policy restrictive for longer.
Traders are now pricing in more than a 28 per cent chance of a quarter-point rate hike by the end of the year, up from 20.7 per cent a week earlier, per CME Group’s FedWatch Tool.
Investors will turn to April retail sales data, due at 8:30 a.m. ET, for signs that higher gasoline and energy costs are beginning to squeeze consumer spending. Weekly initial jobless claims, scheduled for release at the same time, will be watched for clues on the labor market.
Among major movers, Cisco soared 16.5 per cent after the tech networking giant said it would cut nearly 4,000 jobs, as part of a restructuring, and raised its annual revenue forecast after a surge in hyperscaler orders.
AI fervour kept world stocks at record highs on Thursday as investors looked past rising borrowing costs, a high-stakes summit between U.S. President Donald Trump and China’s Xi Jinping and a live political crisis in Britain.
The pan-European STOXX 600 moved 0.5 per cent higher and, with Wall Street futures pointing up too, MSCI’s main world stocks index took its bounce from its Iran war lows to 15 per cent.
Much of the focus was on Beijing where Xi had told Trump that trade talks were making progress. There had been a warningabout Taiwan too, but traders were hoping for deals on tariffs and on AI to keep that red-hot rally running.
Europe’s other big story was the unfolding political crisis in Britain where Prime Minister Keir Starmer was expected to face a leadership challenge following a drubbing in regional elections last week.
Starmer’s tenuous position drove the UK’s 10-year borrowing cost as high as 5.130 per cent on Thursday, its highest since the 2008 financial crisis, as traders braced for what is likely to be a bruising leadership battle.
The pound, which has fallen almost 1 per cent this week as the uncertainty has mounted, was a fraction lower at $1.3505 , although it had some help from news that Britain’s economy unexpectedly grew in March.
“We must presume there is going to be a leadership challenge,” Franklin Templeton’s Global Investment Strategist Michael Browne said.
That will then feed the debate on how much room for manoeuvre a new UK leader would have to adopt more aggressive economic plans given the strains on the country’s finances, Browne added.
“On the surface it doesn’t look like there is much.”
The U.S. dollar held on to its recent gains as investors wagered the Federal Reserve’s next rate move would be a hike after a batch of hotter-than-anticipated inflation reports this week.
Figures on Wednesday saw U.S. producer prices post their biggest gain since early 2022. Tuesday’s consumer price data also showed annual inflationrising at its fastest pace in three years.
Combined with a still strong economy and labourmarket, traders are starting to price in a potential Federal Reserve hike in the first half of 2027, although most economists continue to see a rate cut as the likely next move.
The two-year U.S. Treasury yield hovered near a 1-1/2-month high at 3.9708 per cent in Europe, while the benchmark 10-year U.S. yield stood at 4.468 per cent.
Germany’s 10-year Bund yield was close to its recent multi-year highs at 3.082 per cent and the euro bought $1.1716 amid expectations for a European Central Bank rate hike next month.
The yen,meanwhile, fetched 157.93 per dollar, keeping traders wary of fresh intervention by Tokyo after a recent flurry of sharp moves.
Overnight, China’s blue-chip stocks eased about 0.8 per cent after hitting their highest level since late 2021 at the start of the session, while the yuan rose to a three-year high against the dollar.
Charu Chanana, chief investment strategist at Saxo, said markets were boosted by the fact that the Xi-Trump meeting hadn’t produced any new spats. “So far, that seems to be enough,” Chanana said.
Franklin Templeton’s Browne said he was hopeful for some “significant movement” on U.S.-China trade policy.
“It is going to be about technology and the development of tech - and all that will do is further fuel the AI bubble,” he said.
That was playing out almost everywhere. Japan’s Nikkei hit a new all-time peak in Tokyo as data showed AI-linked demand was helping lift earnings for Japanese firms.
In South Korea, another of Asia’s AI darlings - SK Hynix - was on the verge of joining the elite group of firms with a $1 trillion market cap having seen its stock surge over 200 per cent this year.
Analysts, though, caution that elevated oil prices and the impasse in negotiations to end the war in the Middle East could bring inflationary worries back into view.
Brent crude futures were at $106.5 a barrel in London, while U.S. West Texas Intermediate futures fetched $101.33 per barrel. Both are up roughly 50 per cent since the Iran war erupted in late February.
“Markets are trying to run two playbooks at once: AI and earnings say buy growth, but geopolitics and energy prices are quietly re-writing the inflation trajectory in the background,” said Saxo’s Chanana.
Reuters