Trading Day: Summits, in Beijing and stocks

• Only 53% of S&P 500 stocks are above their 200-day moving average versus the typical 77% when the index hits record highs, indicating weak market breadth that Goldman says can persist 'for months'
• Asian tech giants are flexing muscle as SK Hynix nears $1 trillion market cap and TSMC ramps up capacity, with all three major chipmakers serving the 'Mag 7' U.S. tech companies
• UK political instability emerged as Health Minister resigned and called for leadership contest against PM Starmer, though UK markets showed no clear 'sell UK' signal with falling gilt yields

Market Summary: Global Stocks Hit Records Amid AI Rally and Political Uncertainty

Market Performance:

Global equity markets reached fresh record highs on Thursday, led by a relentless technology rally. The S&P 500, Nikkei, KOSPI, and MSCI All Country indexes hit new peaks, while Shanghai Composite reached an 11-year high. The tech-heavy sector surged 1.9%, though market breadth remained concerningly narrow.

AI Sector Dominance:

AI-related stocks continued their explosive rally. Cerebras jumped 90% on its Nasdaq debut, while Nvidia gained 13% and AMD rose 7%. However, FTSE Russell analysis revealed that just 13 stocks (out of 4,250) generated nearly 50% of the FTSE All-World's April returns—all AI-related. Only 53% of S&P 500 stocks are trading above their 200-day moving average, well below the typical 77% seen at record highs.

Asia's Tech Surge:

Asian tech giants demonstrated strong momentum during President Trump's China summit. South Korea's SK Hynix approached $1 trillion market capitalization, while Taiwan's TSMC aggressively ramped up production capacity. These manufacturers supply hardware to Nvidia and the "Magnificent 7" U.S. tech companies.

Other Market Movements:

• FX: USD index rose 0.4%; USD/JPY climbed above 158 post-intervention; Chinese yuan hit a new 3-year low near 6.78
• Bonds: Yields fell across curves; U.S. yields down 4 bps, UK gilts dropped 8 bps at the long end
• Commodities: Oil remained flat; natural gas declined 5%

Political Developments:

UK Prime Minister Keir Starmer faced mounting pressure after Health Minister Wes Streeting resigned and called for a leadership contest. The British pound slumped, though gilt yields fell, providing mixed signals for UK assets.