US stocks made noticeable gains on Thursday, buoyed by a renewed focus on the artificial intelligence sector and the opening of a high-stakes summit between President Trump and Chinese President Xi Jinping. The Dow Jones Industrial Average climbed 0.7%, gaining more than 350 points and surpassing the 50,000 mark for the first time since February. Meanwhile, the S&P 500 recorded an increase of about 0.8%, crossing the 7,500 threshold, and the tech-heavy Nasdaq Composite rose by 0.9%, driven in large part by Nvidia’s stock surging due to robust AI demand.
As the summit commenced, Trump and Xi both emphasized the importance of enhancing US-China relations. The discussions are expected to cover a range of topics, including tariffs and the expansion of artificial intelligence technologies. Notably, Nvidia’s shares jumped over 4% following the announcement that the US had approved sales of its H200 chips to several Chinese firms, positioning the tech giant favorably during the summit. Key business leaders, including Nvidia’s Jensen Huang, Tesla’s Elon Musk, and Apple’s Tim Cook, were present at the meeting.
During the gathering with American CEOs, Xi reportedly stated that these companies have significant opportunities for involvement in China’s ongoing reform efforts, declaring that “China’s door will only open wider.” This sentiment coincides with hopes that China could play a pivotal role in alleviating tensions in the Middle East, particularly the standoff involving Iran, which has been exacerbating oil prices and raising inflationary concerns.
On the economic front, higher prices stemming from the Iran conflict have reportedly contributed to an uplift in US retail sales for April, as data released on Thursday indicated. In a significant corporate move, Cerebras Systems, an AI chipmaker, began trading under the ticker symbol CBRS, witnessing a surge above its initial public offering price, indicating strong investor interest.
Cisco made headlines as its shares soared after the company announced quarterly earnings that exceeded expectations, along with an AI-centric restructuring plan involving the reduction of around 4,000 jobs. The company’s strong focus on artificial intelligence appears to be drawing investor optimism.
Further supporting the rally, Nvidia’s market capitalization peaked at a record $5.7 trillion amid rising share prices, fueled by positive sentiment surrounding AI technologies ahead of its earnings report. Meanwhile, Honda experienced a jump in its stock price despite posting its first-ever loss, as the company’s new strategic focus on hybrids and optimistic guidance for future performance sparked investor interest.
Initial jobless claims rose to 211,000 during the week ending May 9, slightly above economist forecasts, indicating ongoing complexities in the labor market. Continuing claims also increased to approximately 1.78 million, aligning with expectations.
Amid broader economic concerns, analysts have noted that the “K-shaped” recovery in the US is becoming evident in travel spending behaviors, with higher-income Americans increasing their travel expenditures while lower-income individuals are cutting back significantly.
Trading activity signals that inflationary pressures and rising interest rates may prompt shifts in investor sentiment. As discussions around the war in Iran and other geopolitical tensions unfold, traders remain cautious, balancing optimism in tech sectors with unease about potential economic ramifications moving forward.
