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By Mike Dolan
May 14 (Reuters) –
What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
U.S. President Donald Trump’s two-hour meeting with China’s Xi Jinping in Beijing on Thursday was full of warm words and seemed to skirt many contentious issues – though Xi said trade talks were making progress and issued a warning over Taiwan.
For now, the first day of the summit has offered little for investors to grasp on to. That leaves the market with two dominant themes – oil-fuelled inflation and the AI boom.
I’ll get into that and more below.
But first, check out my latest column on why the Fed may have to hike rates.
And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
‘G2’ CHOREOGRAPHY
On the inflation front, U.S. producer prices in April rankled with their biggest monthly rise in four years, adding to news of above-forecast core consumer price gains in the same month.
Fed models now anticipate that headline annual inflation will be back above 4% in May, and bond markets are restive, with yields rising across the curve as futures move to price a possible Fed rate rise over the next 12 months.
Boston Fed boss Susan Collins said the central bank could no longer look through supply shocks as inflation had remained above target for five years now – and was rising again.
With no end in sight to the U.S.-Iran stalemate, a tough backdrop faces incoming Fed Chair Kevin Warsh, who will take the helm tomorrow after his appointment was confirmed by the Senate on Wednesday.
But rising borrowing rates have done little to dent stock market enthusiasm as Wall Street indexes pushed higher on Wednesday, taking the S&P 500 and Nasdaq to record closing highs. Stock futures pointed higher before the bell, while European shares rose after the open.
In Asia, Japan’s Nikkei hit another record and South Korea’s SK Hynix was on the cusp of becoming the country’s second trillion-dollar market cap after Samsung cleared that milestone last month. Asia’s chip giants were in focus again as Taiwan’s TSMC upped its standing forecast for chip demand through 2030 by 50% to $1.5 trillion.
Meantime, Britain’s political uncertainty eased a touch as Prime Minister Keir Starmer continued to resist calls to stand down. However, a leadership challenge may still be brewing, with health minister Wes Streeting reportedly preparing to resign and mount a bid to oust Starmer.
Chart of the day
The Philadelphia SE semiconductor index has soared 64% in just six weeks, compared to a nearly 17% gain for the S&P 500. Shares of Micron Technology and Advanced Micro Devices more than doubled during that time, while Intel nearly tripled. Analysts estimate that gains in semis and memory stocks accounted for 70% of the $5.1 trillion in market capitalization added by the S&P 500 in 2026.
