Wall Street ends higher on tech rally; investors eye Trump-Xi talks in Beijing

[NEW YORK] US stocks advanced on Thursday (May 14), lifted by a rally in tech stocks as investors absorbed generally solid economic data and watched for developments from Beijing, where US President Trump was engaged in a high-stakes meeting with his Chinese counterpart Xi Jinping.

All three major US stock indexes gained ground, with the S&P 500 and the Nasdaq setting their latest in a series of record closing highs.

The blue-chip Dow closed just 0.3 per cent shy of its all-time closing high reached on Feb 10.

“Everybody’s asking the same question: how much longer does this (rally) go on? There’s a lot of people that are loving this rally, but they’re also antsy at the same time,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “You have to be in it to win it, not just sitting on the sidelines watching the market go to all-time highs.”

Trump attended the summit along with an entourage that included Tesla CEO Elon Musk and Jensen Huang, chief executive of artificial-intelligence chipmaker Nvidia.

Nvidia’s shares closed 4.4 per cent higher after the US cleared the sales of the company’s H200 chips to Chinese firms.

The summit between Trump and Xi is intended to hash out a broad array of issues, including trade, US arms sales to Taiwan and the reopening of the Strait of Hormuz. The waterway, through which Asia gets much of its crude, has been effectively shut down during the US-Israeli war on Iran.

“Obviously, these are very high stakes meetings,” said Michael Monaghan, portfolio manager at Founder ETFs in Dallas. “It is certainly great power competition, but I think that these two economies will be better off working together.”

“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.

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On the economic front, retail sales were in line with expectations, but propped up by rising gasoline prices resulting from the Iran war. Gasoline was largely responsible for the biggest jump in import prices since October 2022.

A series of inflation reports in the week of May 11 showed the risk of spiking energy costs metastasising to other goods and services, extinguishing hopes for near-term rate cuts from the US Federal Reserve.

Kansas City Fed President Jeffrey Schmid called inflation the most “pressing risk” to the US economy, which he characterised as “resilient.” While Schmid is not a voter on monetary policy this year, his remarks reflect the view of the Fed’s hawkish wing.

The Dow Jones Industrial Average rose 370.26 points, or 0.75 per cent, to 50,063.46, the S&P 500 gained 56.99 points, or 0.77 per cent, to 7,501.24 and the Nasdaq Composite gained 232.88 points, or 0.88 per cent, to 26,635.22.

Among the 11 major sectors in the S&P 500, tech shares led the percentage gainers, while materials suffered the steepest loss.

Semiconductor stocks were lifted by Nvidia, while other artificial intelligence-related firms, including Qualcomm , Intel, Sandisk and Micron slid between 3.4 per cent and 6.1 per cent.

Sectors that have suffered amid continued AI fervour, and the ongoing strife in the Middle East, were among the session’s best performers, including software and services, transports and regional banks.

Cisco surged 13.4 per cent to touch an all-time high after the computer networking giant announced almost 4,000 job cuts as part of a restructuring scheme, and raised its annual revenue forecast.

US-listed shares of tech infrastructure firm Nebius Group rose 6.7 per cent after Northland Capital raised its target price by 15.3 per cent to US$248 per share.

China has agreed to buy 200 jets from Boeing, President Trump told Fox News. Even so, the planemaker’s stock slid 4.7 per cent.

Chipmaker Cerebras jumped 68.2 per cent in its US market debut.

Advancing issues outnumbered decliners by a 1.6-to-1 ratio on the NYSE. There were 500 new highs and 95 new lows on the NYSE.

On the Nasdaq, 2,755 stocks rose and 1,980 fell as advancing issues outnumbered decliners by a 1.39-to-1 ratio.

The S&P 500 posted 30 new 52-week highs and 11 new lows while the Nasdaq Composite recorded 113 new highs and 130 new lows.

Volume on US exchanges was 18.77 billion shares, compared with the 18.17 billion average for the full session over the last 20 trading days. REUTERS