Stock markets around the globe surged to new record levels Thursday, with the Nasdaq and S&P 500 extending their remarkable run as investors showed continued enthusiasm for technology shares during ongoing diplomatic discussions between world leaders.
Market watchers are keeping close tabs on the U.S. bond market, where rising yields at both ends of the curve are creating concerns. The 30-year Treasury yield climbing above 5% has grabbed attention, but short-term borrowing costs are also jumping significantly. This presents challenges for the Treasury as it manages its debt obligations with a shorter maturity profile.
During diplomatic talks, Xi cautioned that poor handling of Taiwan issues could lead to a “dangerous” situation, according to reports from the summit.
Thursday’s market performance showed strong gains across multiple regions. The Nasdaq and S&P 500 hit fresh peaks, joined by Asian markets including the Nikkei, KOSPI, and MSCI All Country index. The Shanghai Composite reached an 11-year high, while European markets gained 0.8% and UK stocks rose 0.5%.
Individual company performances varied widely. Cerebras soared 90% on its Nasdaq debut, while Cisco jumped 13% and Ford climbed 7%. Nvidia added 4% to its value. On the downside, Qualcomm fell 6% and Boeing dropped 5%. Technology stocks led the advance with a 1.9% sector gain.
Currency markets saw the British pound as the biggest global decliner. The dollar index strengthened 0.4%, with the dollar-yen exchange rate moving back above 158 for the first time since recent intervention efforts. The dollar reached a new 3-year low against the Chinese yuan near 6.78, while hitting a record high against the Indian rupee.
Bond markets showed declining yields, with UK government bonds falling as much as 8 basis points at the long end and U.S. yields dropping 4 basis points. Yield curves flattened across markets.
In commodities, oil prices ended essentially unchanged while silver declined 5%.
Despite the celebration of new market highs, analysts are raising concerns about the narrow leadership driving these gains. Research from FTSE Russell reveals that nearly half of the FTSE All-World return in April came from just 13 stocks out of 4,250 total holdings, all connected to artificial intelligence themes.
Additional analysis shows that only 53% of S&P 500 companies are trading above their 200-day moving averages, compared to the typical 77% when the index reaches record territory. While this narrow breadth raises sustainability questions, some strategists note that such concentrated leadership can continue for extended periods.
The artificial intelligence boom is particularly evident in Asia, where major technology companies are expanding aggressively. Taiwanese semiconductor manufacturer TSMC announced Thursday that it’s rapidly increasing production capacity, while South Korea’s SK Hynix approaches a $1 trillion valuation.
These Asian technology giants, along with Samsung, are benefiting from massive overseas investment flows as they serve as key suppliers to major U.S. technology companies and provide hardware to Nvidia, currently the world’s most valuable corporation.
Political developments in the UK are also capturing market attention. Health minister Wes Streeting resigned Thursday and called for a leadership contest, increasing pressure on Prime Minister Keir Starmer. While Streeting didn’t formally trigger a contest and his intentions to participate remain unclear, the move suggests growing challenges to Starmer’s leadership.
Adding to the political uncertainty, Manchester Mayor Andy Burnham indicated he would seek a vacant parliamentary seat, potentially positioning himself to challenge Starmer’s leadership. The pound declined Thursday, though government bond yields also fell, creating mixed signals for UK assets.
Looking ahead, several factors could influence Friday’s trading including Middle East developments, energy market movements, ongoing summit discussions between world leaders, and various economic data releases from New Zealand, Japan, and the United States.
