Trump-Xi Summit

The S&P 500 closed its seventh consecutive weekly gain, despite a Friday decline. Key market influences included ambiguity from the Trump-Xi summit, concerns over rising oil prices and bond yields, and strong performance from tech stocks, particularly in AI. The summit yielded few concrete trade advantages, though China signaled an openness to business. Meanwhile, persistent inflation reports complicated the Federal Reserve’s interest rate outlook, and the AI sector showed resilience with a major IPO and strong order backlogs in networking giants.

The markets experienced volatility due to geopolitical events, economic data, and Big Tech earnings. Trump and Xi agreed on rare earths, trade, and fentanyl. The Fed cut interest rates by 25 basis points but tempered expectations for future cuts. Alphabet, Meta, and Microsoft beat earnings estimates, signaling increased capital expenditure driven by AI demand, alleviating fears of a dot-com bubble. Trump’s rare earth deals aim to challenge China’s dominance but face significant hurdles.