Stocks Rise Before the Open as Tech Rally Rolls On, U.S. Retail Sales Data and Trump-Xi Summit in Focus

June S&P 500 E-Mini futures (ESM26) are up +0.31%, and June Nasdaq 100 E-Mini futures (NQM26) are up +0.30% this morning, pointing to further gains after a tech-led rally in the previous session, while investors monitor developments from the U.S.-China talks and await a fresh batch of U.S. economic data, with particular attention on retail sales figures.

The momentum around AI received a fresh boost on Thursday. Cisco Systems jumped over +17% in pre-market trading after the networking giant posted upbeat FQ3 results, issued FQ4 guidance that blew past estimates, and announced plans to cut thousands of jobs. The results indicated that Cisco is successfully transitioning toward the AI economy. Also, Nvidia was poised for a sixth straight session of gains, rising over +2% in pre-market trading. In addition, chipmaker Cerebras Systems raised $5.55 billion in the largest U.S. initial public offering of the year. Still, some of the largest chipmaking names, such as Intel and Micron Technology, took a breather, limiting gains in Nasdaq futures.

Investors are also closely watching the summit between U.S. President Donald Trump and China’s leader Xi Jinping, which has shifted attention away from the war in Iran. The two leaders held talks for nearly two-and-a-half hours at the Great Hall of the People on Thursday, following a welcome ceremony in central Beijing. Trump said China and the U.S. would have a “fantastic future,” and Xi emphasized partnership over rivalry at their meeting, while cautioning that mishandling the Taiwan issue could lead to clashes. Meanwhile, the American readout said the leaders discussed broadening market access for U.S. businesses and that Xi signaled interest in buying more U.S. energy and agricultural products. The leaders also discussed the situation in the Middle East, the Ukraine war, and the Korean Peninsula, according to Xinhua. The Wall Street Journal reported that Trump is likely to seek Xi’s assistance in brokering an agreement to end the U.S.-Iran war.

In yesterday’s trading session, Wall Street’s three main equity benchmarks ended mostly higher, with the S&P 500 and Nasdaq 100 notching new record highs. Most members of the Magnificent Seven stocks advanced, with Alphabet (GOOGL) rising over +3% and Nvidia (NVDA) gaining more than +2%. Also, chip stocks rallied, with ON Semiconductor (ON) surging more than +11% and Marvell Technology (MRVL) climbing over +8% to lead gainers in the Nasdaq 100. In addition, Ford Motor (F) jumped more than +13% and was the top percentage gainer on the S&P 500 after Morgan Stanley analysts highlighted the company’s energy-storage business as “underappreciated.” On the bearish side, Wix.com (WIX) plummeted over -27% after the cloud-based website builder posted weaker-than-expected Q1 results.

Economic data released on Wednesday showed that U.S. April wholesale prices climbed far more than expected, surging to the highest annual level in over three years. The U.S. producer price index for final demand rose +1.4% m/m and +6.0% y/y in April, stronger than expectations of +0.5% m/m and +4.9% y/y. Also, the core PPI, which excludes volatile food and energy costs, rose +1.0% m/m and +5.2% y/y in April, stronger than expectations of +0.3% m/m and +4.3% y/y.

“Wednesday’s PPI was strikingly elevated as producers are feeling the ripple effects of $100 per barrel oil, which is raising the cost of production across the board, as energy is arguably the most critical input cost,” said Clark Bellin at Bellwether Wealth. “The Federal Reserve has an inflation problem on its hands.”

Boston Fed President Susan Collins said on Wednesday that interest rates should stay on hold for “some time,” noting that she remains particularly concerned about elevated inflation. “More than five years of above-target inflation has reduced my patience for ‘looking through’ another supply shock,” Collins said. She added that if the Middle East conflict drags on and prices continue to move higher, “I could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2 percent in a timely manner.”

Minneapolis Fed President Neel Kashkari said the U.S. labor market looks “a bit better” than it did earlier this year, while the conflict has worsened inflation that was already running too high, views that underscore his preference for keeping the Fed’s door open to possible rate hikes.

Meanwhile, Kevin Warsh was confirmed by the Senate as the next Fed chair on Wednesday, taking over an economy grappling with persistent inflation and an increasingly divided group of policymakers.

U.S. rate futures have priced in a 98.6% probability of no rate change and a 1.4% chance of a 25 basis point rate cut at the June FOMC meeting.

Today, investors will focus on U.S. Retail Sales and Core Retail Sales data for April, set to be released in a couple of hours. The data will be used to assess the impact of higher gas prices on retail spending momentum. Economists anticipate that retail sales will rise +0.5% m/m and core retail sales will climb +0.7% m/m in April, compared to the previous figures of +1.7% m/m and +1.9% m/m, respectively. Meanwhile, excluding gasoline service stations and car dealers, retail sales are projected to rise a solid +0.4% m/m in April, only a modest slowdown from the +0.6% m/m gains recorded in the previous two months.

U.S. Initial Jobless Claims data will also be released today. Economists project this figure to be 205K, compared to last week’s number of 200K.

The U.S. Import and Export Price Indexes will be released today as well. Economists expect the import price index to rise +1.0% m/m and the export price index to rise +1.1% m/m in April, compared to the previous month’s figures of +0.8% m/m and +1.6% m/m, respectively.

In addition, market participants will hear perspectives from Fed Governor Michael Barr, Kansas City Fed President Jeff Schmid, Cleveland Fed President Beth Hammack, and New York Fed President John Williams throughout the day.

On the earnings front, notable companies such as Applied Materials (AMAT), Copart (CPRT), and Figma (FIG) are slated to release their quarterly results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.46%, down -0.20%.

The Euro Stoxx 50 Index is up +0.88% this morning, supported by gains in technology stocks, while investors monitor developments from the U.S.-China talks. Trading volumes are likely to remain light with some local markets closed for the Ascension Day holiday. Technology stocks led the gains on Thursday as enthusiasm around AI remained strong after U.S. network-equipment stalwart Cisco Systems issued better-than-expected FQ4 revenue guidance. Data from the Office for National Statistics released on Thursday showed that the U.K.’s economy grew at a quicker pace in the first quarter, outperforming the U.S. and most of its European peers, but that resilience is likely to be severely tested as the effects of the Middle East conflict persist. Also, U.K. monthly GDP unexpectedly grew in March, with the ONS noting that some industries reported activity being brought forward in anticipation of higher costs stemming from the conflict. Separately, final data from the INE confirmed that Spain’s annual inflation rate eased to 3.2% in April. Meanwhile, European Central Bank chief economist Philip Lane said on Wednesday that a global oil shock stemming from the Middle East conflict could require the central bank to raise interest rates to prevent higher fuel costs from feeding into wages, inflation expectations, and broader prices. In corporate news, Watches of Switzerland Group Plc (WOSG.LN) surged over +14% after the company provided above-consensus annual operating profit guidance.

U.K. GDP (preliminary) and Spain’s CPI data were released today.

U.K. GDP has been reported at +0.6% q/q and +1.1% y/y in the first quarter, compared to expectations of +0.6% q/q and +0.8% y/y.

U.K. March GDP rose +0.3% m/m and +1.2% y/y, stronger than expectations of -0.1% m/m and +0.7% y/y.

The Spanish April CPI rose +0.4% m/m and +3.2% y/y, in line with expectations.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -1.52%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.98%.

China’s Shanghai Composite Index closed lower today as President Xi Jinping met with his U.S. counterpart Donald Trump, with investors locking in some profits following a recent tech-led rally while awaiting clearer signals from the talks. Technology stocks led the declines on Thursday. Billy Leung, an investment strategist at Global X Management, said, “It’s a classic buy the news and sell the facts. The pending visit and the release of the list of company management joining the visit did provide a lot of discussion and optimism to the headlines, especially in the domestic China market.” Trump and Xi held talks for nearly two-and-a-half hours at the Great Hall of the People on Thursday. Trump said China and the U.S. would have a “fantastic future,” and Xi emphasized partnership over rivalry at their meeting. At the same time, Xi cautioned Trump about the risk of conflict if the Taiwan issue is mishandled, in contrast to the upbeat remarks the two leaders exchanged about the direction of their relationship. Investors had low expectations for the summit, but were hoping for at least reassurances about extending the China-U.S. trade truce. Meanwhile, Reuters reported that the U.S. and China are considering a potential framework under which each side would identify roughly $30 billion in goods for tariff relief without jeopardizing national security interests. Separately, Bloomberg reported that China has reinstated import licenses for hundreds of U.S. beef plants. Elsewhere, China’s offshore yuan inched higher for an 11th straight day, marking its longest winning streak since September 2017. In corporate news, Alibaba Group rose over +3% in Hong Kong as investors remained optimistic about the company’s cloud and AI business.

Japan’s Nikkei 225 Stock Index reversed earlier gains and closed lower today as worries about inflation and rising interest rates prompted investors to lock in profits. The Nikkei initially climbed to a new all-time high, tracking a tech-led rally on Wall Street overnight, but later turned lower as technology stocks fell. SoftBank Group dropped over -4% even after the AI investor reported a jump in quarterly profit. Losses in real estate, industrial, and financial stocks also weighed on the benchmark index. Meanwhile, benchmark Japanese government bonds declined for a fourth straight session on Thursday, with yields approaching a three-decade high, as inflation concerns and fiscal worries intensified. Bank of Japan policy board member Kazuyuki Masu said on Thursday that an interest rate hike by the central bank could be imminent, as he voiced concern that higher oil prices will exert persistent pressure on inflation. “If statistical data do not indicate clear signs of an economic downturn, I believe it is desirable to raise the policy rate at the earliest stage possible,” Masu said. Mizuho Securities economist Yusuke Matsuo said that Masu’s hawkish speech indicates he is likely to vote for a rate hike at the bank’s next meeting in June. At the same time, Reuters reported on Thursday that Japan’s government is considering compiling a supplementary budget to ease the burden on households from rising fuel bills, a move that would add pressure to the country’s strained finances. In other news, foreign investors bought a net 1.44 trillion yen ($9.12 billion) worth of Japanese stocks in the week to May 9th, extending their buying streak to a sixth consecutive week, according to Ministry of Finance data. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.96% to 29.67.

Pre-Market U.S. Stock Movers

Cisco Systems (CSCO) jumped over +17% in pre-market trading after the networking giant posted upbeat FQ3 results, issued FQ4 guidance that blew past estimates, and announced plans to cut thousands of jobs.

Nvidia (NVDA) rose more than +2% in pre-market trading after Reuters reported that the chipmaker had secured U.S. approval to sell H200 chips to roughly 10 Chinese companies.

Starbucks (SBUX) advanced over +1% in pre-market trading after TD Cowen upgraded the stock to Buy from Hold with a price target of $120.

Some chip and AI infrastructure stocks retreated in pre-market trading as investors opted to lock in some profits after a recent rally, with Intel (INTC) falling about -4% and Sandisk (SNDK) dropping more than -2%.

Doximity (DOCS) cratered over -21% in pre-market trading after the telehealth company posted weaker-than-expected FQ4 adjusted EPS and issued below-consensus FY27 revenue guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - May 14th

Applied Materials (AMAT), Copart (CPRT), Forgent Power Solutions (FPS), Legence (LGN), Figma (FIG), Dillard’s (DDS), Intuitive Machines (LUNR), Bullish (BLSH), Celcuity (CELC), Versant Media Group (VSNT), Klarna Group (KLAR), Ondas (ONDS), Boot Barn Holdings (BOOT), York Space Systems (YSS), Fermi (FRMI), Alumis (ALMS), YETI Holdings (YETI), Infleqtion (INFQ), NIQ Global Intelligence (NIQ), NextNav (NN), Rumble (RUM), HeartFlow (HTFL), TMC the metals company (TMC), Flowers Foods (FLO), United States Antimony (UAMY), NANO Nuclear Energy (NNE), Aveanna Healthcare Holdings (AVAH), Wolverine World Wide (WWW), Jefferson Capital (JCAP), Sabine Royalty Trust (SBR), WhiteFiber (WYFI), Newsmax (NMAX), Eton Pharmaceuticals (ETON), ASP Isotopes (ASPI), Terrestrial Energy (IMSR), Sky Harbour Group (SKYH), Terra Innovatum Global (NKLR), Bit Digital (BTBT), Candel Therapeutics (CADL), CorMedix (CRMD), Gemini Space Station (GEMI), Innventure (INV), REGENXBIO (RGNX), KinderCare Learning Companies (KLC), Lifeway Foods (LWAY), Invivyd (IVVD), Benitec Biopharma (BNTC), Cadiz (CDZI), Innovative Aerosystems (ISSC), Genie Energy (GNE), Forward Industries (FWDI), CapsoVision (CV), Alliance Entertainment Holding (AENT), BK Technologies (BKTI), Eightco Holdings (ORBS), Maui Land & Pineapple Company (MLP), Virgin Galactic Holdings (SPCE).