Wall Street rises on strong AI outlook, US-China talks in focus, Nvidia surges 3%, Cisco jumps 16%
At 09:54 a.m. ET, the Dow Jones Industrial Average rose 0.54%, the S&P 500 gained 0.38%, the Nasdaq Composite gained 0.35%
US stock indices rose on Thursday on positive sentiment about the US-China summit, and as Nvidia and Cisco shares climbed on strong artificial intelligence outlook.
At 09:54 a.m. ET, the Dow Jones Industrial Average rose 270.32 points, or 0.54%, to 49,963.52, the S&P 500 gained 28.32 points, or 0.38%, to 7,472.57 and the Nasdaq Composite gained 92.85 points, or 0.35%, to 26,495.19.
Quick answers to key questions
US stock indices rose on Thursday due to positive sentiment surrounding the US-China summit and strong performance from Nvidia and Cisco shares, driven by a positive artificial intelligence outlook.
The 'Trump Pivot' theory suggests that when aggressive trade or foreign policy actions cause a significant market sell-off, the administration tends to dilute its stance to protect equity performance. Investors view this as a negotiating tactic rather than a fixed destination.
AI-related investment is expected to drive a significant portion of S&P 500 earnings growth. The massive capital expenditure in cloud infrastructure is directly benefiting semiconductor giants and energy providers, with the market rewarding the 'physicalization' of tech.
While traditionally a conflict involving Iran and the Strait of Hormuz would impact equities, the US market has shown immunity. This is partly due to the US being a leading oil producer, allowing its energy sector's profits to offset consumer costs, and also due to optimism surrounding fragile ceasefires.
Cisco shares jumped due to the company increasing its yearly forecasts and citing intense demand for AI-specific assets. They also announced plans to cut jobs amid productivity improvements.
At the opening bell, the Dow Jones Industrial Average rose 150.4 points, or 0.30%, to 49,843.58. The S&P 500 rose 10.1 points, or 0.14%, to 7,454.4, while the Nasdaq Composite rose 23.1 points, or 0.09%, to 26,425.468.
Traders are hoping that Trump's China trip delivers breakthroughs in Washington's attempts to secure a truce deal with Iran that results in the unblocking of the Strait of Hormuz.
Investors also expect for lessening commerce frictions between the two superpowers.
Chinese leader Xi Jinping's reception of US President Donald Trump featured much of formal spectacle, but also a sharp caution regarding Taiwan.
US retail sales in April rose 0.5% from the preceding month, though the expansion included the price-increase effect of costlier fuel rates following Iran's barring of Hormuz to most fuel vessels.
"Consumers aren't in a recession, but they're not powering the economy either. Higher inflation, tariffs and demographic changes have taken a toll on retail spending as a growth driver," said David Russell, Global Head of Market Strategy at TradeStation.
"Today's retail numbers don't ring any alarm bells at the Fed, so they keep an upward bias on interest rates. The consumer is strong enough to rule out rate cuts."
Key Stock Movers
Nvidia stock surged 3%, giving the chipmaker a market valuation of about $5.6 trillion, after Reuters reported that the US has cleared about 10 Chinese firms to buy its second-most powerful AI chip, the H200.
Cisco shares jumped 16.2% as the firm increased its yearly forecasts, mentioning intense demand for AI-specific assets.
Crude Oil
Crude oil prices dropped on Thursday after Iran's local press reported around 30 ships had traversed the Strait of Hormuz in past periods.
Meanwhile, the White House, discussing US President Donald Trump's gathering with Chinese President Xi Jinping, stated both figures concurred the Strait of Hormuz should be accessible for the clear movement of power.
Brent crude oil futures were down 60 cents, or 0.6%, to $105.03 a barrel at 1422 GMT. US West Texas Intermediate futures dropped 52 cents, or 0.5%, to $100.50.
Bullion
Gold prices slipped on Thursday while stakeholders concentrated on the latest occurrences in the West Asian conflict.
At 9:42 a.m. EDT (1342 GMT), spot gold was down 0.4% at $4,668.34 per ounce. US gold futures for June delivery fell 0.7% to $4,672.70.
Among other metals, spot silver fell 3.8% to $84.62 per ounce, platinum fell 3.4% to $2,065.50, and palladium was down 3.7% at $1,443.74.
About the Author
With a distinguished career spanning nearly two decades at the highest levels of financial journalism, Rajendra Kumar Saxena stands as a cornerstone of the editorial leadership team at Livemint.com. In his current capacity as Content Editor, he is responsible for managing the comprehensive editorial lifecycle of the publication. His role is multifaceted, encompassing the strategic selection of high-impact stories, original reporting, and meticulous editing. <br> Furthermore, Rajendra is instrumental in executing a sophisticated Search Engine Optimization (SEO)-driven content strategy, ensuring that the platform's digital content reaches a global audience while maintaining the highest standards of journalistic integrity and accuracy prior to publication. <br> Rajendra’s professional journey is characterized by a profound expertise in a wide array of critical sectors. His analytical depth covers global economics, commodities, and stock market dynamics (across both Indian and United States landscapes). <br> Beyond the financial markets, he possesses a keen understanding of political affairs, banking and finance, foreign affairs, and the rapidly evolving technology sector. <br> His eighteen years journey in financial and business journalism includes a significant tenure at Financialexpress.com and freelance contributions to The Hindu. <br> Currently based in Delhi, Rajendra holds a Master of Journalism degree from the prestigious Makhanlal Chaturvedi National University of Journalism and Communication (MCNUJC). His blend of academic rigor and decades of on-the-ground experience makes him a leading voice in navigating the complexities of today’s financial world.
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