(May 21): Global stocks rose for a second day on Thursday as investors flocked back to the artificial intelligence (AI) trade and a clutch of upcoming initial public offerings (IPOs) kept enthusiasm for the technology sector elevated.
The MSCI All Country World Index gained 0.5%, while Asian equities climbed 2.7%. Tech stocks in the region, seen as the picks-and-shovels beneficiaries of the AI build-out, jumped the most in six weeks. South Korea’s Kospi advanced as much as 8.1%, the biggest gain since early April.
LG Electronics Inc and Hyundai Mobis Co both surged over 10% in Seoul after Nvidia Corp chief executive officer Jensen Huang highlighted physical AI and robotics as “the second category” poised to become even bigger. Chip heavyweight Samsung Electronics Co climbed almost 8% after averting a strike. Nvidia itself didn’t benefit from the mood, with its shares falling 1.3% in extended trading, as traders were unimpressed even after results beat estimates.
Share sale news also kept the market interested in tech. SoftBank Group Corp’s stock surged 20% in Tokyo OpenAI prepared to file for an IPO. SpaceX also filed for an IPO.
Stocks are rebounding from recent losses that were driven by rising global bond yields and concerns that the AI-fuelled equity rally had stretched valuations too far. Investors have been grappling with inflation risks from elevated oil prices, scaling back bets on central bank interest-rate cuts and reviving speculation that borrowing costs may rise further.
See also: Stocks decline on inflation fear after bonds slump
Meanwhile, President Donald Trump said the US is in the “final stages” with the Islamic Republic, raising expectations for a near-term restart of energy flows through the critical Strait of Hormuz. That sent oil lower on Wednesday and eased inflation concerns, helping bonds rebound from their recent sell-off.
“Asia’s technology markets are riding a clear relief wave today, with Nvidia’s blow-out earnings effectively pressing the reset button on regional sentiment,” said Hebe Chen, an analyst at Vantage Global Prime. “Easing geopolitical tension has added to the risk-on tone, helping revive appetite that had been squeezed by rising bond yields and persistent macro uncertainty.”
Wall Street gauges rose on Wednesday on expectations for a peace deal in Iran. Even so, a sense of caution remained in markets, with Brent crude oil edged back up to near US$106 ($135.62) a barrel after sliding 5.6% on Wednesday.
See also: US 30-year yield hits highest since 2007 on inflation angst
Equity-index futures for the US erased earlier losses to edge up 0.1% and European stocks were set to gain at the open.
Meanwhile, JPMorgan Chase & Co chairman and CEO Jamie Dimon said rates may climb much higher from current levels, a warning to bond investors at a time when yields have touched multi-year highs.
“They could be much higher than they are today,” Dimon said in an interview with Bloomberg Television. “We may have gone from a saving glut to not enough savings.”
In geopolitical news, Iran is reviewing the US’ new draft in response to Tehran’s 14-point proposal and is yet to give an answer, Tasnim reported. President Masoud Pezeshkian posted on X that Iran has “explored every avenue to avert war”, adding that “all paths remain open from our side”.
“I would love to believe this, but let’s face it: How many times have we heard this before?” said Win Thin, the chief economist of Bank of Nassau 1982, after Trump’s remarks.
Corporate highlights:
- SpaceX filed publicly for what stands to be the largest-ever IPO, revealing billions in losses and the super-voting share plan allowing Elon Musk to keep the company under his control.
- OpenAI is preparing to file for an IPO in the coming weeks and is targeting a public debut sometime in the fall, according to a person familiar with the plan.
- JPMorgan's Dimon said the Wall Street giant will likely hire more AI specialists and fewer traditional bankers as the adoption of the technology accelerates.
- Intuit Inc is cutting about 17% of its staff, or about 3,000 workers, a move to trim costs while the financial software company invests in AI products.
- Lowe’s Cos reported sales growth in the first quarter that just missed estimates, yet kept its full-year outlook unchanged in the face of higher transportation costs, in part due to productivity boosts from AI.
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Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 1.56pm Tokyo time on Thursday
- Japan’s Topix rose 2.1%
- Australia’s S&P/ASX 200 rose 1.6%
- Hong Kong’s Hang Seng was little changed
- The Shanghai Composite was little changed
- Euro Stoxx 50 futures rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at US$1.1623
- The Japanese yen was little changed at 158.99 per dollar
- The offshore yuan was little changed at 6.8028 per dollar
Cryptocurrencies
- Bitcoin rose 0.4% to US$77,945.82
- Ether rose 0.4% to US$2,142.77
Bonds
- The yield on 10-year Treasuries was little changed at 4.59%
- Japan’s 10-year yield advanced one basis point to 2.780%
- Australia’s 10-year yield declined 11 basis points to 4.96%
Commodities
- West Texas Intermediate crude rose 0.7% to US$98.99 a barrel
- Spot gold fell 0.2% to US$4,537.01 an ounce
Uploaded by Tham Yek Lee
