Equities advance with tech boost, dollar rises after data
Global Markets React to Tech Surge and Economic Data
By Sinéad Carew and Marc Jones
NEW YORK/LONDON, May 14 (Reuters) - Strong demand for technology stocks lifted equity indexes around the world on Thursday, while the dollar rose after economic data and investors awaited the outcome of a U.S.-China summit.
In bonds, benchmark 10-year Treasury yields edged down after hitting an 11-month high as U.S. government debt found buying interest at key technical levels.
Oil prices were trading higher after settling close to flat. Attacks on one ship and the seizure of another stoked concerns about the flow of energy supplies due to the Iran war, while Iran's state media reported that about 30 vessels had crossed the Strait of Hormuz, a key energy conduit.
While Britain's pound weakened on uncertainty about its political leadership, the dollar climbed for a fourth straight day after economic data kept expectations intact that the Federal Reserve was unlikely to adjust interest rates this year.
U.S.-China Talks and Tech Stocks Drive Market Sentiment
Diplomatic Developments
U.S.-CHINA TALKS IN FOCUS
In Beijing, China's President Xi Jinping warned U.S. President Donald Trump at the start of their two-day summit that disagreement over Taiwan could send relations down a dangerous path and even lead to conflict. Trump told Fox that China agreed to order 200 Boeing jets, marking the country's first purchase of U.S.-made commercial jets in nearly a decade.
Technology Sector Performance
Helping push the S&P 500 and the Nasdaq to fresh closing records was a rally in technology shares, including chipmaker Nvidia, which added more than 4%. Earlier, Reuters reported the U.S. has cleared about 10 Chinese firms to buy Nvidia's second-most powerful AI chip, the H200.
Broad technology sentiment was also boosted by a more than 13% surge in Cisco shares after its earnings report and job cut announcement, according to Garrett Melson, portfolio strategist at Natixis Investment Managers.
"Investors are more worried about missing out on the upside than worrying about any sort of downside," said Melson. "The path of least resistance is that the AI trade is really on fire right now. And there's still evidence that investors are probably under-risked, particularly to that complex that has just ripped to the upside."
Major Indexes Reach New Highs
On Wall Street, the Dow Jones Industrial Average rose 370.26 points, or 0.75%, to 50,063.46, putting it closer to its prior record close.
The S&P 500 rose 56.99 points, or 0.77%, to 7,501.24 and the Nasdaq Composite rose 232.88 points, or 0.88%, to 26,635.22, marking record closes for both.
MSCI's gauge of stocks across the globe rose 6.25 points, or 0.56%, to 1,115.56.
The pan-European STOXX 600 index closed up 0.76%.
Currency and Bond Markets Respond to Economic Data
Dollar Strengthens on Economic Indicators
DOLLAR RISES ON DATA
In currencies, the dollar was higher after economic data, including retail sales for last month, in line with expectations, continued to push out any market hopes for a potential rate cut from the Federal Reserve.
"When we look at the fundamentals here, American consumers are still spending. They are telling pollsters that they're more cautious, but at the same time, they're not walking the talk," said Karl Schamotta, chief market strategist at Corpay in Toronto.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.43% to 98.89, with the euro down 0.36% at $1.1668.
Against the Japanese yen, the dollar strengthened 0.34% to 158.38.
UK Political Crisis Impacts Sterling
UK POLITICAL CRISIS
Sterling weakened 0.95% to $1.3395 as investors monitored an unfolding political crisis in Britain, while data showed that its economy unexpectedly grew in March.
Britain's Prime Minister Keir Starmer is facing a potential leadership challenge after heavy losses in regional elections last week. While Health Minister Wes Streeting - seen as a possible successor - said he was resigning and had lost confidence in Starmer's leadership, UK Education Minister Bridget Phillipson told reporters Starmer has the support of his cabinet.
Bond Yields and Commodity Prices
In U.S. Treasuries, the yield on benchmark U.S. 10-year notes rose 0.2 basis points to 4.481%, from 4.479% late on Wednesday, while the 30-year bond yield fell 1.4 basis points to 5.0304%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.1 basis points to 4.011%.
U.S. crude futures extended gains to rise to $102.09 a barrel in post-settlement trading while Brent was trading at $106.68 per barrel, up 0.99% after settling at $105.72.
In precious metals, spot gold fell 0.78% to $4,650.82 an ounce.
Reporting Credits
(Reporting by Sinéad Carew, Chuck Mikolajczak in New York, Marc Jones in Londong, Ankur Banerjee in Singapore. Editing by Andrew Heavens, Mark Potter, Philippa Fletcher, Rod Nickel)