Dow retakes 50,000 level, S&P 500 and Nasdaq surge to fresh records as AI trade roars back

The S&P 500 (^GSPC) and Nasdaq (^IXIC) jumped to record highs on Thursday while the Dow Jones Industrial Average (^DJI) retook 50,000.

Nvidia’s (NVDA) market cap reached a record $5.7 trillion on Thursday as the AI chip heavyweight’s stock surged more than 4%. Competitor Cerebras (CBRS) began trading on Thursday afternoon under the ticker symbol CBRS, surging above its IPO price.

Enthusiasm over the AI trade has sent the market higher. Meanwhile, higher inflation has pushed out expectations of rate cuts.

Nvidia’s (NVDA) market cap reached a record $5.7 trillion on Thursday as the AI chip heavyweight’s stock surged more than 4% to reach an all-time intraday high.

Nvidia shares rallied along with the tech (XLK) sector ahead of the semiconductor giant’s earnings next week.

The jump also came after Reuters reported that the US Commerce Department had cleared about 10 Chinese firms to buy the H200, its second-most-powerful chip. The report said the approved Chinese companies included Alibaba (BABA), Tencent (0700.HK), ByteDance, and JD.com (JD).

Pras Subramanian reports:

Japan’s Honda (HMC) posted its first-ever loss in its 70+ year history as a public company following a strategy shift from EVs, which cost it dearly. But a refocused plan to lean into hybrids and upbeat guidance for the year ahead have investors bullish.

Honda said total EV-related losses for the fiscal year ended March 2026 came in 1.579 trillion yen ($10 billion), leading to an operating profit loss of 414.3 billion yen ($2.625 billion).

Read more here.

Shares in the AI chip developer Cerebras Systems (CBRS) are expected to begin trading at $350 per share when the company enters the public market for the first time this afternoon, according to Bloomberg.

If correct, the $350 pricing would represent an 89% jump over the listing price of $185 per share.

Cerebras’ IPO is expected to be the largest so far this year, with a $5.55 billion fundraise. The figure also makes it the largest US semiconductor IPO on record, surpassing the $5.23 billion raised by Arm Holdings (ARM) in 2023.

Cerebras is one of a growing number of companies looking to challenge Nvidia’s (NVDA) chokehold on the chip design market. Arm Holdings and its majority owner SoftBank (SFTBY) had staged a last-hour approach to try to buy Cerebras only weeks before the IPO, per Bloomberg, but the offer was denied.

Cerebras focuses on inference speed, and claims its hardware runs AI models faster than Nvidia’s. The chips are already being used by OpenAI (OPAI.PVT), and Amazon (AMZN) has said it will begin using the company’s technology as well, per Bloomberg.

“Fast inference will be a fundamental part of the inference market. We have a shot to take a meaningful portion of it. We have to execute. We have a great deal of work ahead of us,” CEO Andrew Feldman said.

China’s chokehold on the global supply of rare earth materials is “comparable to Iran’s hold over the Strait of Hormuz,” according to William Blair analysts Neal Dingmann and Bert Donnes.

As President Trump meets with Chinese leader Xi Jinping in Beijing this week, rare earths are expected to be among the several topics discussed by the leaders of the world’s largest economies.

Rare earths, critical throughout industries including weapons manufacturing, batteries, and EV development, have become the focal point of a tit-for-tat escalation of trade maneuvers between Washington and Beijing.

China currently controls 70% of mining capacity, 90% of separation capacity, and around 92% of oxide and magnate production for rare earth minerals and metals worldwide, according to the Center for Strategic and International Studies.

“We view China’s current hold on worldwide rare earths and its ability to halt supply whenever it deems advantageous as comparable to Iran’s hold over the Strait of Hormuz,” Dingmann and Donnes said.

As the war in Iran sends gasoline and jet fuel prices surging, the “K-shaped economy” is showing up in Americans’ travel spending, according to Bank of America economists Liz Krisberg and David Tinsley.

While the war in Iran has only pushed about 10% of Americans to outright cancel a trip, higher-income Americans are spending more on travel at a faster rate than middle- and lower-income Americans, the economists said.

Where middle- and upper-income travel spending is increasing, 40% of lower-income households have no travel plans, and travel-related spending activity is down year over year for the income cohort, according to BofA data.

And while most Americans aren’t canceling trips due to the war-driven price increases, many are looking to take fewer trips or cut back on items like accommodations — even as overall spending continues to largely hold up.

Initial jobless claims rose to 211,000 in the week ended May 9, according to data released by the Department of Labor on Thursday, coming in above the previous week’s revised tally of 199,000 first-time claims.

Economists had expected initial claims to be slightly lower at 205,000 for the week, according to consensus estimates compiled by Bloomberg. The four-week moving average of initial claims ticked up to 203,750 from the previous week’s 203,000 revised average.

Continuing claims, which track the unemployed population still seeking work, rose to roughly 1.78 million in the week ended May 2, compared to the previous week’s revised count of roughly 1.76 million continuing claims.

Economists had been looking for 1.78 million continuing claims.

The US stock market opened into the green on Thursday after President Trump and Chinese leader Xi Jinping concluded their first major sit-down in a high-stakes US-China summit.

The Dow Jones Industrial Average (^DJI) rose 0.8%, while the S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) each climbed 0.3% following a record-setting Wednesday for Wall Street stocks.

Several leading American CEOs joined the US president on the trip, including Tesla’s (TSLA) Elon Musk and Nvidia’s (NVDA) Jensen Huang. Xi reportedly told the group that their companies could be “deeply involved in China’s reform and opening up” and that “China’s door will only open wider.”

Nvidia shares rose more than 2% Thursday morning on news that the US had approved H200 chip sales to several Chinese companies.

Cisco (CSCO) shares soared after its quarterly earnings beat expectations, and the networking giant laid out an AI-focused restructuring plan that will cut around 4,000 jobs. Klarna Group (KLAR) also popped after the company said it swung to a $1 million profit on the first quarter from a $99 million loss a year earlier.

Chinese President Xi Jinping warmly welcomed a delegation of US CEOs on hand in Beijing for the two-day US-China summit as President Trump looks to extend US business interests in China.

Our Washington correspondent Ben Werschkul reports:

The business leaders were on hand for an arrival ceremony and a portion of a bilateral meeting held in China’s Great Hall of the People, where Trump proceeded to introduce them to Xi “one by one,” according to Chinese state media.

Xi reportedly responded to US desires to do more business in China by saying the companies could be “deeply involved in China’s reform and opening up” and that “China’s door will only open wider.”

The outreach received a positive reaction from the CEOs with Tesla’s (TSLA) Elon Musk, Nvidia’s (NVDA) Jensen Huang, and Apple’s (AAPL) Tim Cook all spotted by reporters leaving in good spirits.

“It was awesome,” Musk said when asked how his talks with Xi went.

Xi has offered similar promises in years past — often to little avail — but it was nonetheless a striking message from the Chinese leader to begin the two-day visit and echoed a message Trump himself has been delivering ahead of the trip.

Read more here.

In a closed-door meeting between the leaders of the world’s largest economies on Thursday, President Trump and Chinese leader Xi Jinping agreed the Strait of Hormuz must be reopened and remain free of any future militarization or tolling.

Yet, beyond broad diplomatic statements, the first major sit-down between Trump and Xi appears to have yielded little progress on the war in Iran and no firm commitments from China, even as the White House had hoped to pressure Beijing into providing more aid.

“I suspect the US would like to use the Trump-Xi meeting to push China to pressure Iran back to the negotiating table,” Jorge León, head of geopolitical analysis at Rystad Energy, told Yahoo Finance.

“But unless China sees a clear benefit in doing so — for example, avoiding a much more severe energy shock or securing concessions from Washington — I doubt Beijing will be eager to fully exercise that leverage.”

Read more here.