Global stocks pushed higher on Thursday, driven by surging investor appetite for artificial intelligence plays, while markets kept a close watch on a high-stakes meeting between Donald Trump and Xi Jinping in Beijing.
At the centre of the market rally was SK Hynix, whose shares have surged more than 200% this year, putting the chipmaker on the cusp of a $1 trillion valuation. The company’s rise reflects the broader boom in AI-related demand, which continues to drive earnings and investor optimism across global markets.
The Trump–Xi summit, held at Beijing’s Great Hall of the People, is expected to focus on maintaining a fragile trade truce, alongside broader geopolitical tensions including the Iran war and U.S. arms sales to Taiwan.
Investors are not expecting major breakthroughs. Analysts suggest that simply preserving stability between the world’s two largest economies may be enough to support markets in the short term.
Across Asia, markets showed mixed momentum. Japan’s Nikkei hit a fresh record high, buoyed by strong AI-linked earnings, while China’s blue-chip stocks pulled back slightly after earlier gains. The yuan, however, climbed to a three-year high against the dollar, reflecting cautious optimism around the talks.
Broader regional indices remained near record levels, with MSCI’s Asia-Pacific index hovering just below last week’s peak. European and U.S. futures also pointed to modest gains.
Still, beneath the surface, risks are building.
Elevated oil prices, driven by ongoing tensions in the Middle East, are fuelling renewed inflation concerns. Brent crude remains above $105 a barrel, well above pre-war levels, complicating the outlook for central banks and economic growth.
Strategists warn that markets are balancing two competing narratives: strong corporate earnings powered by AI, and a more fragile macroeconomic backdrop shaped by geopolitics and energy shocks.
The U.S. dollar held firm after stronger-than-expected inflation data this week, reinforcing expectations that the Federal Reserve may need to keep interest rates higher for longer, or even tighten further.
For now, the AI-driven rally is holding. But with geopolitical uncertainty and inflation pressures still in play, markets remain finely poised between momentum and caution.
