US stock futures experienced a downturn following a positive trading day on Wall Street, as investors awaited the concluding discussions between President Trump and Chinese President Xi Jinping. Futures linked to the Dow Jones Industrial Average slipped by 0.2%, while the S&P 500 futures fell by 0.3%. Similarly, contracts for the Nasdaq 100 showed a decline of 0.5%.
In after-hours trading, shares of Applied Materials and Figma saw notable increases, buoyed by earnings reports that indicated strong demand, particularly in the context of the ongoing AI boom. During regular trading hours, the Dow regained the 50,000 mark, with the S&P 500 and Nasdaq reaching new heights, spurred on by confidence in the AI sector. Additionally, the recent high-profile market debut of chipmaker Cerebras contributed to the positive market sentiment.
As President Trump wraps up his visit to Beijing, he prepares to return to Washington, having been accompanied by 16 prominent US executives. His trip has largely been characterized by a focus on business, resulting in new agreements involving firms like Boeing and Nvidia. However, ongoing diplomatic tensions, particularly regarding Taiwan and Iran, continue to cast a shadow over the discussions.
The earnings season is also approaching its conclusion, with companies like Mizuho Financial Group, RBC Bearings, and Sigma Lithium Corporation expected to release their results soon.
In the commodities market, oil is on track for a week of gains, primarily due to the ongoing disruptions in the Strait of Hormuz. Reports indicate that Brent crude has increased to nearly $107 a barrel, reflecting a roughly 5% rise this week, while West Texas Intermediate hovered around $102. The situation has been exacerbated by a US naval blockade of Iranian ports and hazardous conditions for maritime activities, with unauthorized personnel seizing a commercial vessel at the entrance to the strait.
During his meeting with Xi Jinping, President Trump addressed the importance of keeping the Strait of Hormuz open for energy trade, along with discussions aimed at enhancing American oil exports to China. While the Chinese officials did not mention energy in their summary of the talks, they acknowledged that the Middle East was a topic of discussion.
The ongoing conflict in the region has severely impacted global oil inventories and, according to the International Energy Agency, the market is likely to remain “severely undersupplied” until October, even if hostilities cease sooner. Recent US data has highlighted how the escalating conflict is fueling inflation, creating additional pressure for Trump as the midterm elections approach.
