Market Watch
Tech Giants Drive Indices to Fresh Highs as Geopolitical Talks dominate agenda
Wall Street extended its rally on Thursday, with the S&P 500 and Nasdaq touching fresh intraday record highs, led by chipmaker Nvidia, as investors weighed solid economic data against escalating geopolitical risk stemming from the high-stakes US-China summit in Beijing. The Dow Jones Industrial Average rose 270.32 points, or 0.54 percent, to 49,963.52.
The S&P 500 gained 0.38 percent to 7,472.57, while the Nasdaq Composite advanced 0.35 percent to 26,495.19. Technology stocks led the charge, with the S&P 500 technology index rising 1 percent. Nvidia climbed 3 percent after the United States cleared approximately 10 Chinese firms to buy the company’s H200 artificial intelligence chip, lifting the chipmaker’s market valuation to nearly $5.6 trillion. Cisco Systems surged 14.7 percent to an all-time high after the networking giant raised its annual revenue forecast following strong demand from hyperscaler clients, even as it announced plans to cut nearly 4,000 jobs as part of a restructuring exercise.
Retail sales in the United States rose 0.5 percent in April, matching economist estimates, according to the Commerce Department. However, analysts noted that a portion of the increase likely reflected higher inflation driven by elevated energy and commodity prices amid the ongoing Iran conflict. David Russell, global head of market strategy at TradeStation, said in comments reported by Reuters: “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.”
Wall Street Rally and Tech Sector Performance
Investor attention remained fixed on the two-day summit between Chinese President Xi Jinping and US President Donald Trump in Beijing. Speaking at the Great Hall of the People, Xi warned that mishandling the Taiwan question — which he called “the most important issue in US-China relations” — could place bilateral ties in “great jeopardy” and risk outright conflict. The two leaders agreed that the Strait of Hormuz must remain open and free of tolls, and that Iran must not obtain nuclear weapons. Xi also expressed interest in purchasing more US crude oil to reduce China’s dependence on the Hormuz transit route.
In commodity markets, Brent crude oil held above $105 per barrel, having recovered from an earlier sell-off linked to Hormuz disruption risk. Gold traded above $4,700 per ounce, supported by dollar weakness and persistent central bank buying. The US Dollar Index edged 0.4 percent lower as markets awaited clarity from the summit outcome.
On the interest rate outlook, recent higher-than-expected consumer and producer inflation readings have strengthened expectations that the US Federal Reserve could hold rates elevated for longer. According to CME Group’s FedWatch Tool, traders are now pricing in more than a 28 percent probability of a quarter-point rate hike by the end of 2026, up from 20.7 percent a week ago — a shift that could dampen equity valuations and increase borrowing costs across the economy.
US-China Summit and Geopolitical Risk
Trump invited Xi to visit the United States on September 24, with the two leaders also expected to meet at APEC and G20 gatherings later in the year. Harvard professor Graham Allison, who coined the term “Thucydides Trap” to describe rising-ruling power conflict, told CNBC he expects the existing trade truce between the two nations to formalize into a full agreement by autumn — though he cautioned that the Taiwan issue remains the single greatest source of instability in the bilateral relationship.
Markets will eye next week’s Federal Reserve meeting minutes and any further signals from the OPEC+ coalition on supply management as key near-term catalysts.
