Global equity markets closed mostly higher on Wednesday, with the S&P 500 and Nasdaq Composite reaching fresh record highs as investors looked past stronger-than-expected producer price inflation data and instead focused on resilient economic growth, robust corporate earnings, and optimism surrounding the Trump-Xi meeting in Beijing.
The Nasdaq climbed 1.2% and the S&P 500 gained 0.6%, supported by strong performance in technology and communication services equities, while the Dow Jones Industrial Average edged 0.1% lower.
Semiconductor and technology-related shares led gains, with Nvidia, Apple, Amazon, and Cisco all advancing as enthusiasm around artificial intelligence and cloud infrastructure continued to underpin sentiment.
Asian markets also finished mostly higher, reflecting hopes that renewed US-China dialogue could help stabilise trade and technology relations.
Inflation and bond yields remain in focus
Despite the positive tone in equities, inflation concerns remained in focus after US producer prices rose more sharply than expected in April, driven largely by elevated energy costs and broader increases in services prices.
Bond yields moved higher, with the 10-year US Treasury yield rising to around 4.48%, as investors scaled back expectations for near-term interest-rate cuts and considered the possibility that the Federal Reserve may need to maintain a restrictive policy stance for longer.
The Senate confirmation of Kevin Warsh as the next Federal Reserve chair reinforced expectations of policy continuity, while comments from Fed officials suggested inflation risks remain a key concern.
Corporate earnings season also continued supporting markets, with around 91% of S&P 500 companies having reported results and the vast majority exceeding expectations, highlighting the continued strength and breadth of earnings growth across sectors.
Asian markets edge higher ahead of Trump-Xi summit
Asian equities edged higher today, supported by technology and semiconductor shares after Wall Street reached record highs.
Hong Kong outperformed, driven by gains in Alibaba shares, while Japanese and South Korean equities posted advances.
Chinese markets declined on profit-taking ahead of the Trump-Xi summit, amid ongoing concerns over inflation and oil supply disruptions.
US futures and European markets advance
US equity futures edged higher overnight following record closes for the S&P 500 and Nasdaq, supported by continued strength in technology and semiconductor shares ahead of the Trump-Xi meeting.
Nasdaq 100 futures led gains.
In after-hours trading, Cisco Systems shares surged nearly 20% after strong results, while Doximity shares fell sharply following disappointing earnings.
European equities closed sharply higher on Wednesday, ending a four-session losing streak as technology shares rebounded and banks remained stable.
The STOXX 50 gained 1% and the STOXX 600 rose 0.7%, led by strong advances in AI-related shares including Infineon and ASML.
Positive corporate earnings updates from Allianz and Merck also supported market sentiment.
US dollar and oil prices stay elevated
The US dollar strengthened this week, with the dollar index holding near 98.5, supported by hotter US inflation data linked to the Iran conflict and expectations that the Federal Reserve will keep rates higher for longer.
Markets have priced out cuts and raised odds of a hike.
EUR/USD eased to 1.1714 amid dollar demand and higher US yields.
Oil prices were little changed on Thursday as investors awaited the Trump-Xi meeting in Beijing for signals on the Iran conflict and energy supply risks.
Brent and WTI crude remained above $100 a barrel amid Strait of Hormuz concerns.
OPEC lowered its 2026 global demand growth forecast, while falling US inventories continued supporting prices.
US producer prices rise sharply
US producer prices rose sharply in April, with the producer price index climbing 1.4% monthly and 6% annually, driven mainly by soaring energy costs linked to the Iran war.
Petrol prices surged 15.6%, fuelling broader inflation concerns.
Markets now expect more Federal Reserve rate rises, although policymakers are likely to keep rates unchanged for now.
Corporate earnings and company updates
Cisco Systems
Cisco Systems reported record third-quarter revenue of $15.8 billion, driven by strong demand for AI-related networking infrastructure, while raising its full-year outlook.
Shares surged more than 20% after hours.
The company also announced restructuring plans, including fewer than 4,000 job cuts and a $1 billion charge, as it shifts focus towards artificial intelligence growth opportunities.
Siemens AG
Siemens AG beat Q2 fiscal 2026 earnings expectations, with higher EPS and record orders led by Smart Infrastructure.
Revenue slightly missed forecasts and Industrial Business profit declined year-on-year.
Digital Industries outperformed, while Mobility and Healthineers weakened.
Full-year guidance was maintained, and the company announced a share buyback programme.
Alibaba Group
Alibaba Group reported 3% quarterly revenue growth, driven by cloud and AI demand, though sales slightly missed forecasts.
Cloud revenue rose 38%, while AI-related revenue maintained triple-digit growth for the eleventh consecutive quarter.
Profitability fell due to heavy investment in AI and infrastructure and weaker margins, alongside an announced annual cash dividend.
SoftBank Group
SoftBank Group posted a sharp rise in Q4 profit, driven by strong gains from its Vision Fund and AI-related investments.
Net profit surged year-on-year, boosted by valuation gains, particularly in OpenAI.
However, higher debt and rising finance costs reflected continued heavy borrowing to fund its AI investment strategy.
Nebius Group
Nebius Group reported a nearly eightfold jump in quarterly revenue, driven by strong demand for AI infrastructure and cloud services, boosting shares.
It raised capex guidance to $20–25bn and is expanding capacity through major contracts and acquisitions.
Despite rapid growth, analysts flagged margin pressure due to heavy investment and scaling costs.
Ford Motor Company
Ford Motor Company shares surged about 9% yesterday after investor optimism around its new energy storage business, marking its strongest gain in years.
The unit will use LFP battery technology to serve data centres, utilities and industrial customers.
Ford is investing $2bn, with first deliveries expected in 2027, while analysts highlighted its CATL licensing deal as a key advantage.
Netflix
Netflix has signed a four-year deal with the NFL covering an opening international game, a Thanksgiving Eve game and a season-end game, plus an extended Christmas Day fixture.
The move expands its live sports offering to boost subscribers and advertising revenue.
It also comes as Netflix grows its ad-supported tier across multiple countries.
SAP
SAP used its Sapphire conference to present an ambitious AI strategy centred on Business AI, its Business Data Cloud and partnerships with major tech firms.
However, shares fell as investors focused on limited near-term monetisation visibility and delayed migration benefits.
Analysts remain positive long term, but expect meaningful financial impact mainly from 2026 onwards.
TSMC
TSMC said the global chip market could exceed $1.5 trillion by 2030, driven by AI and high-performance computing, which will account for 55% of demand.
The company is rapidly expanding capacity, targeting advanced node growth and CoWoS packaging.
It is scaling fabs in Arizona, Japan and Germany, while accelerating AI-driven wafer demand and investment.
Venezuela debt restructuring
Venezuela launched a restructuring of its sovereign and PDVSA debt, seeking relief from long-standing unsustainable obligations and aiming to restore fiscal stability.
The announcement lifted bond prices as investors welcomed a potential path toward resolution.
The plan targets debt reduction, with further details on timelines and creditor negotiations still to be provided.
Morgan Stanley
Morgan Stanley raised its 12-month S&P 500 target to 8,300, implying 12% upside, driven by stronger earnings rather than higher valuations.
The bank forecasts robust EPS growth through 2028, citing resilient first-quarter results and improving revisions.
It favours Industrials, Financials and Consumer Discretionary stocks, while remaining neutral on small caps and Healthcare.
Coherent Corp
Coherent Corp shares rose about 8% on Wednesday after BofA Securities raised its price target to $400, citing stronger demand for 800G and 1.6T transceivers and improved earnings leverage.
Analysts highlighted Coherent’s market share and supply advantage in optical components.
Broader sector gains also supported the stock amid tighter chip supply conditions.
MercadoLibre
MercadoLibre was downgraded to Neutral/High-Risk from Buy after weaker-than-expected Q1 2026 results.
Analysts cited margin uncertainty, prolonged heavy investment and rising competitive pressure.
While revenue growth remains strong, earnings visibility has weakened and further forecast cuts are expected.
The price target was reduced to $1,950.
AMD, Arm, and Intel
Advanced Micro Devices, Arm Holdings and Intel all retained Outperform ratings from Evercore after Q1 2026 server CPU data showed further market share shifts.
AMD and Arm gained share, while Intel’s fell to 55%.
Evercore maintained a bullish “CPU renaissance” outlook, expecting strong long-term unit growth and more balanced market share across the three firms.
Johnson & Johnson
Johnson & Johnson was upgraded to “Outperform” by Leerink Partners, which raised its price target on expectations of accelerating growth from new drugs.
Key drivers include Icotyde, Inlexzo, Rybrevant and Tremfya, supporting stronger long-term revenue growth.
However, risks remain from clinical trials, litigation and pricing pressure despite a bullish outlook.
Akamai Technologies
Akamai Technologies was upgraded to Buy by Bank of America, with the price target raised to $175 as analysts highlighted its shift toward AI-driven edge infrastructure.
Growth in cloud services and a $1.8bn contract support the outlook, though rising capex may pressure near-term cash flow and margins before longer-term acceleration in revenue and earnings.
Upcoming economic data and events
Today’s calendar includes initial and continuing jobless claims, retail sales, import and export prices, business inventories, and natural gas stocks in the US.
UK figures feature GDP growth data for Q1 alongside monthly output readings.
Later, US mortgage rates, Fed balance sheet data, and several Federal Reserve speeches are also scheduled.
Key earnings include Applied Materials, SMIC, and National Grid.
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