AI Rally Powers Global Markets Despite Trade and Iran Risks
Global markets continued their AI-driven rally on Thursday as investors brushed aside concerns over stubborn inflation, elevated oil prices and uncertainty surrounding the Iran conflict.
Technology stocks once again led gains across Asia, with chipmakers and artificial intelligence firms extending a record-setting surge that has dominated markets in recent months. Investors appeared willing to overlook the possibility of higher interest rates for longer, even as oil prices stayed above $100 a barrel and geopolitical tensions remained unresolved.
At the centre of attention was the summit between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing. However, the talks have so far produced few concrete announcements, leaving investors cautious but not alarmed.
Trump and Xi Begin High-Stakes Talks
Trump described Xi as both a “great leader” and a friend as the two leaders opened two days of discussions at Great Hall of the People.
The agenda includes trade relations, the Iran conflict and U.S. arms sales to Taiwan. Despite the lack of detailed outcomes so far, markets have remained relatively calm because expectations for major breakthroughs were already low.
The summit featured a highly choreographed welcome ceremony in Beijing, with Trump arriving alongside several high-profile business executives. The delegation included Elon Musk and Jensen Huang, whose companies are seeking greater clarity and market access in China.
Nvidia remains central to the global AI boom, as demand for advanced chips continues to surge among major cloud computing firms and hyperscalers.
Asian Markets Extend AI-Fuelled Gains
The AI investment theme continued to dominate trading across Asia. South Korea’s KOSPI index and Taiwan’s benchmark stock index traded close to record highs reached earlier in the week, while Japan’s Nikkei 225 climbed to another all-time peak.
Investors have poured money into semiconductor firms and AI-linked companies, encouraged by soaring profits and expectations of sustained demand for advanced computing infrastructure.
South Korean memory chipmaker SK Hynix remained one of the standout performers. The company’s stock has risen more than 1,000% since the start of 2025 and is nearing a market valuation of $1 trillion.
The rapid gains underline how heavily global equity markets now depend on enthusiasm surrounding artificial intelligence and semiconductor demand.
UK Data in Focus Amid Political Pressure
In Europe, investor attention shifted towards upcoming UK economic data, including gross domestic product figures and industrial and construction output numbers for March.
The data is expected to provide a clearer picture of the economic impact from the Iran conflict, which began escalating at the end of February. Rising geopolitical risks and higher energy costs have placed renewed pressure on the British economy, sterling and government bonds.
Meanwhile, political uncertainty in Britain has intensified following heavy local and regional election losses for Prime Minister Keir Starmer and the Labour Party.
Although Starmer has resisted calls to resign, investors continue to monitor whether the political fallout could weaken confidence further at a sensitive moment for the economy.
Markets Remain Focused on AI Momentum
Despite geopolitical tensions and economic uncertainty, investors continue to prioritise growth opportunities linked to artificial intelligence.
Strong earnings from semiconductor firms and sustained demand from major technology companies have reinforced optimism across equity markets, particularly in Asia.
For now, the AI rally appears resilient enough to outweigh concerns about inflation, oil prices and diplomatic uncertainty between Washington and Beijing.
With inputs from Reuters