Global markets remained heavily focused on geopolitics and artificial intelligence-driven equity momentum, as developments surrounding the US-China summit and Middle East tensions shaped investor sentiment across asset classes.
The British Pound came under pressure following the resignation of UK Health Secretary Wes Streeting, adding fresh political uncertainty to UK markets despite stronger-than-expected economic data. UK GDP YoY came in at 1.2%, beating forecasts of 1.1% and improving from the previous 1.0%, offering some support to broader confidence in the UK economy.
In the United States, Secretary of State Marco Rubio stated that Washington is not seeking China’s assistance regarding the Strait of Hormuz, while also noting that President Trump and China’s President Xi Jinping found “common ground” on Iran. Meanwhile, the White House confirmed that both sides agreed Iran must never obtain a nuclear weapon.
Oil markets remained volatile as Brent crude approached $106 per barrel amid ongoing tensions surrounding Middle East shipping routes. Iran’s Fars News reported that Chinese vessel transit through the Strait of Hormuz resumed following understandings regarding Iran’s management protocols. However, maritime risks persisted after the UKMTO reported that a vessel had been seized by unauthorized personnel and redirected toward Iranian territorial waters.
Equity markets were once again driven by technology and artificial intelligence optimism. Nasdaq 100 futures advanced, putting the index on track for another record close this week. Nvidia extended gains for a sixth consecutive session, while Cisco surged after raising its sales guidance, boosting broader confidence across networking and semiconductor sectors.
The AI-driven rally continued to dominate sentiment globally, with technology shares offsetting concerns around inflation and elevated oil prices. Although some semiconductor stocks such as Intel and Micron saw profit-taking after recent sharp rallies, investor appetite for the sector remained strong. The enthusiasm was further reinforced after AI company Cerebras completed the largest IPO of the year so far.
Attention also centered on the high-profile summit between Donald Trump and Xi Jinping in Beijing. Trump described future US-China relations as “fantastic,” while Xi emphasized stable and constructive bilateral ties. Investors interpreted the meeting as a potential step toward easing trade tensions between the world’s two largest economies.
China also signaled greater economic openness, with Xi expressing interest in expanding imports of American oil and further opening China’s economy to international business. However, Chinese equities struggled to maintain momentum, with mainland indices retreating despite the constructive diplomatic tone.
In fixed income markets, Treasury yields edged slightly lower after recent inflation-driven rises, while investors continued monitoring the possibility of future Federal Reserve rate hikes as energy prices remain elevated.
By Amir Amidian
Senior Market Analyst | Zylostar
