By US stocks opened higher on Thursday as investors reacted to strong earnings from technology companies and optimism surrounding the US-China summit.
The continued momentum in artificial intelligence-linked semiconductor stocks despite persistent inflation concerns.
The Dow Jones Industrial Average rose 387 points, reclaiming the 50,000 level it reached earlier this year.
S&P 500 gained about 0.34%, while Nasdaq Composite also moved higher by 0.30% after the benchmark indexes closed at fresh record highs on Wednesday.
The advance came even after recent inflation reports reinforced expectations that the Federal Reserve may keep interest rates elevated for longer.
Cisco earnings and Nvidia rally lift futures
Technology stocks continued to drive market gains, led by strong moves in Cisco Systems and Nvidia.
Cisco shares surged roughly 16.5% after the networking giant reported fiscal third-quarter results and guidance that exceeded Wall Street expectations.
The company also announced plans to cut nearly 4,000 jobs as part of a broader restructuring effort.
The rally in Cisco helped boost the Dow significantly, with investors also responding positively to raised annual revenue forecasts tied to increased demand from hyperscale customers.
Nvidia shares rose 2.49% after Reuters reported that the US government had cleared about 10 Chinese companies to purchase Nvidia’s H200 artificial intelligence chips, though deliveries have not yet begun.
The gains added to a broader semiconductor rally that has helped push US equities to record highs in recent weeks.
Micron Technology and other AI-linked chipmakers also continued to attract investor demand amid expectations of sustained infrastructure spending tied to artificial intelligence development.
Trump-Xi summit remains in market focus
Markets also closely monitored developments from President Donald Trump’s summit with Chinese President Xi Jinping in Beijing.
According to reports, Trump traveled with a delegation that included Nvidia CEO Jensen Huang and Tesla CEO Elon Musk as discussions focused on trade, technology access, tariffs, and the ongoing Iran conflict.
Chinese President Xi reportedly told Trump that trade negotiations were progressing but warned that tensions over Taiwan could damage relations between the two countries.
Iran and global energy markets also remained central to the discussions.
A White House official said both sides agreed that the Strait of Hormuz must remain open as disruptions linked to the Iran conflict continue affecting oil prices and global supply chains.
Investors viewed Huang’s participation in the summit as a potentially positive signal for future Nvidia business opportunities in China.
Inflation concerns persist despite market optimism
The rally in equities came despite growing concerns that inflation pressures may remain elevated longer than previously expected.
Recent consumer and producer price reports both showed stronger-than-expected increases, driven partly by higher energy costs tied to the Middle East conflict.
Producer prices rose 1.4% in April, marking the largest monthly increase since March 2022.
The inflation data has prompted traders to scale back expectations for Federal Reserve interest-rate cuts.
According to CME Group’s FedWatch Tool, markets are now pricing in more than a 28% chance of a quarter-point rate increase by year-end, up from roughly 21% one week earlier.
The Labor Department reported that initial jobless claims rose to 211,000 for the week ended May 9, an increase of 12,000 from the previous week and slightly above economists’ expectations of 205,000.
Continuing claims, which are reported with a one-week lag, increased by 24,000 to 1.78 million.
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