Wall Street stock indexes opened higher on Thursday as Nvidia's shares jumped, while investors assessed economic data and watched developments around the high-stakes U.S.-China summit. The Dow Jones Industrial Average rose 150.4 points, or 0.30%, at the open to 49,843.58, while the S&P 500 rose 10.1 points, or 0.14%, at the open to 7,454.4, and the Nasdaq Composite rose 23.1 points, or 0.09%, to 26,425.468 at the opening bell. According to latest reports, technology gained 2.1% on the session making it the strongest sector of the day by a wide margin. Seven of eleven S&P 500 sectors closed higher with advancing stocks outnumbering decliners by more than 2 to 1 on the NYSE. The Nasdaq still recorded 104 new lows against 87 new highs, indicating the rally remains narrow at the index level despite strong gains. As per Reuters, all three major U.S. stock indexes gained ground, with the S&P 500 and the Nasdaq setting their latest in a series of record closing highs, while the blue-chip Dow closed just 0.3% shy of its all-time closing high reached on February 10.
Nvidia rose 4.4% on Thursday, giving the chipmaker a market valuation of $5.7 trillion, after Reuters reported citing sources that the U.S. has cleared about 10 Chinese firms to buy its second-most powerful AI chip, the H200. As reported by The Economic Times, this development has significantly boosted investor confidence in the AI chipmaker's prospects in the Chinese market, contributing to the broader technology sector rally. The approved Chinese companies include Alibaba (BABA), Tencent (0700.HK), ByteDance, and JD.com (JD). The H200 approval changes the demand picture meaningfully as Chinese companies that have been locked out of the most advanced American chips now have access to a processor that sits just below the top tier. Recent reports indicate that CEO Jensen Huang is attending a summit in China with President Trump, with the chipmaker potentially closer to selling more AI chips to China, further supporting the stock's momentum. According to Reuters, Trump attended the summit along with an entourage that included Tesla CEO Elon Musk and Jensen Huang, chief executive of artificial-intelligence chipmaker Nvidia.
Cisco surged 13.4% to touch an all-time high after the tech networking giant issued a stronger-than-expected revenue outlook of $16.7-16.9 billion for fiscal fourth quarter, well above Wall Street expectations of roughly $15.8 billion. The company also announced an AI-focused restructuring plan that will cut around 4,000 jobs, impacting under 5% of the workforce. According to Benzinga, Cisco's strong performance has been a key driver of the broader AI rally alongside Nvidia. The networking giant's robust outlook and strategic pivot toward AI technologies have reinforced investor confidence in the technology sector's growth prospects. The company's strong performance has been a key driver of the broader AI rally alongside Nvidia.
Chinese President Xi Jinping told President Donald Trump at the start of a two-day summit on Thursday that trade talks were making progress, but warned that tensions over Taiwan could put relations on a dangerous path and even risk conflict. According to The Economic Times, Trump's visit also comes against the backdrop of the war with Iran, with the president expected to seek Beijing's help in ending the costly conflict that has sent global energy prices surging. The summit between Trump and Xi is intended to hash out a broad array of issues, including trade, U.S. arms sales to Taiwan and the re-opening of the Strait of Hormuz. As per Reuters, the waterway, through which Asia gets much of its crude, has been effectively shut down during the U.S.-Israeli war on Iran. Xi reportedly told business leaders their companies could be "deeply involved in China's reform and opening up" and that "China's door will only open wider." Michael Monaghan, portfolio manager at Founder ETFs in Dallas, noted that "Obviously, these are very high stakes meetings. It is certainly great power competition, but I think that these two economies will be better off working together." According to Reuters, "I'm happy to see the two leaders collaborating, a tone of collaboration, and hopefully we'll see that follow through in long-term agreements," Monaghan added.
This week's stronger consumer prices and producer prices readings have reinforced expectations that the Federal Reserve will keep monetary policy restrictive for longer. As reported by The Economic Times, traders are now pricing in more than a 28% chance of a quarter-point rate hike by the end of the year, up from 20.7% a week earlier, per CME Group's FedWatch Tool. Three consecutive hot inflation prints this week have reinforced the view that the Fed holds rates elevated through year end, with investors aware of that backdrop and choosing to buy technology stocks anyway despite the inflation concerns. According to Reuters, a series of inflation reports this week showed the risk of spiking energy costs metastasizing to other goods and services, extinguishing hopes for near-term rate cuts from the U.S. Federal Reserve. Kansas City Fed President Jeffrey Schmid called inflation the most "pressing risk" to the U.S. economy, which he characterized as "resilient." While Schmid is not a voter on monetary policy this year, his remarks reflect the view of the Fed's hawkish wing.
