BY COMFORT OGBONNA
Global stock markets pushed higher on Thursday as investor enthusiasm surrounding artificial intelligence continued to fuel demand for technology shares, helping markets shrug off concerns about rising interest rates and persistent geopolitical tensions.
Investors also kept a close watch on a high-profile summit between U.S. President Donald Trump and Chinese President Xi Jinping, although the meeting produced few immediate surprises for financial markets.
At the start of the two-day summit, Xi said trade negotiations between the United States and China were making progress, offering a cautiously optimistic tone. However, he also warned that tensions surrounding Taiwan remained a serious source of friction that could destabilize relations between the world’s two largest economies if not carefully managed.
Despite the geopolitical sensitivity of the discussions, investors appeared largely unfazed as traders focused instead on strong momentum in global technology stocks and the ongoing boom surrounding artificial intelligence.
European stock futures pointed toward a positive market open, while U.S. stock futures also edged higher. Analysts said the lack of negative developments from the Trump-Xi meeting was enough to reassure investors who had feared fresh trade tensions or geopolitical escalation.
China’s blue-chip stock index slipped slightly after touching its highest level since late 2021 earlier in the session, while the Chinese yuan strengthened to a three-year high against the U.S. dollar, reflecting improving investor sentiment toward Chinese assets.
Market strategists noted that expectations for the summit had been relatively low, meaning investors were satisfied simply by the absence of major confrontations or unexpected policy shocks.
The ongoing rally in technology and AI-related stocks continued to dominate trading activity across Asia and global markets. Japan’s benchmark Nikkei index climbed to a fresh all-time high, supported by strong earnings and growing demand tied to artificial intelligence technologies.
In South Korea, shares of semiconductor giant SK Hynix remained near record levels as investors continued pouring money into companies linked to the AI supply chain. The chipmaker is now approaching a $1 trillion market valuation, potentially becoming only the second South Korean company after Samsung to reach that milestone.
SK Hynix shares have surged more than 200% this year as demand for advanced memory chips used in AI systems continues to accelerate globally. The rally reflects growing confidence that artificial intelligence investment will remain one of the strongest drivers of corporate earnings and market growth over the coming years.
Broader Asian markets also remained near historic highs, with MSCI’s Asia-Pacific index outside Japan hovering close to records reached last week.
Still, analysts warned that markets may be underestimating the risks posed by rising energy prices and prolonged conflict in the Middle East. The war in the region, which erupted earlier this year, has driven crude oil prices sharply higher and reignited concerns that inflation could remain elevated globally.
Brent crude oil futures traded above $105 per barrel, while U.S. crude prices stayed above $100 per barrel, both significantly higher than levels seen before the conflict began. Rising energy costs have forced governments in several countries to consider new support measures for consumers and businesses struggling with inflationary pressure.
Some analysts believe markets are currently balancing two competing narratives: optimism around AI-driven growth and corporate earnings on one side, and fears of inflation and geopolitical instability on the other.
Currency markets also reflected growing caution around inflation and interest rates. The U.S. dollar held onto recent gains after fresh economic data showed inflation pressures remain strong in the United States.
This week’s producer price data showed the largest monthly increase since early 2022, following earlier consumer inflation figures that revealed prices rising at their fastest annual pace in three years. The stronger-than-expected inflation reports have reinforced expectations that the Federal Reserve may maintain higher interest rates for longer.
Some traders are even beginning to consider the possibility that the Fed’s next move could eventually be another rate hike rather than a cut, although most economists still expect easing to occur later down the line if inflation eventually cools.
The euro remained near its lowest level in a week against the dollar, while the British pound also weakened amid concerns over growing political uncertainty in the United Kingdom.
Meanwhile, the Japanese yen stayed under pressure near multi-decade lows against the dollar, keeping traders alert for possible intervention by Japanese authorities seeking to stabilize the currency.
In bond markets, U.S. Treasury yields remained elevated, with the benchmark 10-year Treasury yield trading near levels not seen in almost a year. Higher yields reflect investor concerns that inflation and energy prices could keep monetary policy tighter for longer than previously expected.
For now, however, optimism surrounding artificial intelligence and resilient corporate earnings continues to outweigh fears of higher rates and geopolitical uncertainty, helping global equities maintain their upward momentum.
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