General Market News

Chinese AI stocks MiniMax and Knowledge Atlas surged after Nvidia CEO Jensen Huang joined Trump's Beijing visit, raising hopes China will gain access to Nvidia's advanced H200 chips. Both companies are expected to join the Hang Seng Tech Index in June, potentially triggering $1.25-$1.75 billion in passive inflows. Analysts have turned bullish, with Morgan Stanley raising price targets and China Merchants Securities initiating buy ratings on both firms.

• Access to Nvidia's H200 chips is viewed as critical for China's AI ambitions; Trump administration approved H200 licenses months ago, but Chinese authorities have been cautious, having rejected less-advanced H20 chips last year.
• Morgan Stanley raised its price target for Knowledge Atlas to HK$990 from HK$560 and MiniMax to HK$1,100 from HK$990, citing commercialization acceleration and Zhipu's coding capabilities.
• Chinese AI model pricing has risen to 17% of US model costs in Q1 2026 from just 5% a year earlier, while analysts forecast each frontier AI developer could generate at least $1 billion in revenue this year, potentially doubling next year.

Hyperscalers (major tech companies) are dramatically ramping up AI-related capital spending, with 2026 estimates reaching $725 billion—nearly double the estimates from just one year ago. This massive buildout requires enormous amounts of electricity, creating significant investment opportunities in energy infrastructure, power generation, and related sectors. The spending represents a historic investment cycle comparable in scale to entire national economies.

• AI capex estimates for 2026 have surged to $725 billion, up from $365 billion estimated just a year ago, with UBS projecting $511 billion spent on power generation capacity additions alone by 2030
• Natural gas and solar are expected to see 'sold out order books' from AI demand, with companies like Hut 8 (signed $9.8 billion deal, analysts target $118.13) and Fluence Energy benefiting from the buildout
• UBS recommends stocks including First Solar, Array Technologies, Vertiv, and Nidec as beneficiaries, while BNP Paribas suggests investment-grade debt plays in Taiwan, AI infrastructure high-yield debt, and IG banks/telecoms

U.S. President Donald Trump arrived in Beijing on May 13, 2026, for a presidential summit with Chinese President Xi Jinping. Trump is accompanied by CEOs from major American companies including Nvidia's Jensen Huang. The high-stakes meetings are expected to address tariffs, rare earths, AI, the Iran war, and Taiwan, with potential announcements of large Chinese purchases of American planes and soybeans.

• Trump's schedule includes a welcome ceremony, bilateral meeting with Xi, a tour of a historic site, and a state banquet on Thursday, followed by tea and working lunch on Friday before departing
• Sen. Steve Daines suggested potential trade deals involving 'Boeing, beef and beans' and emphasized both leaders' interest in keeping relations stable and de-escalating tensions
• Trump posted on Truth Social that he expected 'great things' to come from the summit, signaling optimism about the negotiations

Spirits company Sazerac has invested in canned cocktail brand SIPMARGS, which is backed by TikTok influencer Alix Earle (8.5 million followers), through an exclusive distribution partnership. The deal continues Sazerac's expansion into ready-to-drink beverages targeting Gen Z consumers, following recent investments in 818 Tequila, BuzzBallz, and Dirty Shirley.

• SIPMARGS raised $3 million in 2025 from investors including Earle and Kygo's venture capital firm Palm Tree Crew; the size of Sazerac's investment was not disclosed
• Sazerac generates over $6 billion in annual sales with 500+ brands and has acquired around 60 brands in the last decade
• The partnership aims to give SIPMARGS national distribution infrastructure to compete with major beverage brands while Sazerac pursues Gen Z consumers in the growing RTD category

Wholesale prices in the United States jumped 1.4% in April, significantly exceeding economist expectations. The producer price index (PPI) came in nearly three times higher than the Dow Jones consensus forecast of a 0.5% increase, signaling stronger inflationary pressures at the wholesale level.

• The PPI increase of 1.4% was nearly triple the expected 0.5% rise according to Dow Jones consensus
• The surge in wholesale prices suggests broader inflationary pressures that could impact consumer prices downstream
• Higher-than-expected wholesale inflation may influence Federal Reserve monetary policy decisions

U.S. inflation surged to 3.8% annually in April, the highest since 2023, driven by energy prices up 18% year-over-year amid the Iran War and broader price pressures across categories. The unexpected spike pushed markets lower and led traders to price in potential Fed rate hikes rather than cuts, with some forecasting inflation could reach 4% this year.

• Energy prices rose 3.8% in April and nearly 18% annually due to surging oil prices from the Iran War, but inflation also reaccelerated in other categories signaling broad consumer pressure
• Fed funds futures traders now rule out rate cuts before end of 2027 and instead price in a rate increase by year-end; the S&P 500 declined in Tuesday's session following the inflation data
• OpenAI CEO Sam Altman testified in Musk's lawsuit, calling Elon Musk's management style 'demotivated' and his departure from OpenAI a 'morale boost'; Nvidia CEO Jensen Huang joined Trump's China visit after the president personally called to invite him

US stock futures showed a mixed tone on May 13, 2026, with Nasdaq futures up 0.7% and Dow Jones futures down 0.2% as President Trump arrived in Beijing for talks with Chinese President Xi Jinping. The meeting is expected to cover trade, AI, Taiwan, and energy security, with tech executives from Apple, Tesla, Boeing, and other major firms accompanying Trump.

• WTI crude traded near $102 per barrel amid US-Iran tensions, with reports of UAE retaliatory strikes on Iran raising concerns about broader Middle East conflict
• S&P 500 forward earnings surged 2.5% in the best weekly non-crisis gain in 32 years, driven by strong Q1 reports and an 'extraordinary' 51-week streak of gains
• Nine of 11 S&P 500 sectors reached record-high forward earnings, with AI capex and US-onshoring boom fueling growth across previously lagging sectors like Materials

The U.S. and China are developing a 'Board of Trade' mechanism that would reduce tariffs on approximately $30 billion worth of non-sensitive goods for each country, marking a shift from demanding China change its economic model to pursuing numerical trade targets. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng met in South Korea to finalize proposals ahead of a Trump-Xi summit in Beijing. The approach focuses on managed trade in non-strategic sectors while maintaining broad tariffs and export controls on national security-sensitive technologies.

• U.S.-China bilateral goods trade fell 29% to $415 billion in 2025 from $582 billion in 2024, with the U.S. trade deficit dropping 32% to $202 billion, its lowest level in two decades
• Potential tariff reductions may focus on U.S. energy and agricultural exports to China, where Beijing currently imposes retaliatory duties of 10% on crude oil, 15% on LNG and coal, and up to 55% on beef
• U.S. Trade Representative Greer describes the mechanism as a plug 'adapter' connecting incompatible economic systems, abandoning previous demands for China to adopt market-oriented reforms in favor of balanced trade in non-strategic goods

SMA Solar reported a 27% year-over-year sales increase in its home and business division for Q1, driven by rising European demand for rooftop solar panels since the Iran war began in late February. The surge reflects heightened energy security concerns as households seek to reduce exposure to higher fuel costs, reversing a slowdown in new installations seen in 2025.

• First-quarter sales in the home and business unit reached 61 million euros ($71.5 million), up from 48 million euros in the same period last year
• SMA Solar now expects full-year company-wide sales in the upper third of its 1,475-1,675 million euro forecast range due to geopolitical tensions driving demand
• The EMEA region accounted for approximately three-quarters of residential and commercial sales in Q1, though CFO Kaveh Rouhi cautioned it remains uncertain whether demand will have a sustained impact

U.S. consumer inflation hit 3.8% in April 2024, double the Fed's 2% target, with headline inflation expected to exceed 4% in May. Markets have eliminated rate cut expectations for the year and now price an 80% probability of a rate hike by April 2025. The inflation surge, driven partly by elevated oil prices amid the Iran war, pushed 30-year Treasury yields above 5%.

• Fed futures now show zero chance of rate cuts in 2024 and an 80% probability of a rate hike as soon as April 2025
• The 'trimmed mean' inflation measure favored by incoming Fed Chair Kevin Warsh posted its largest monthly increase since January 2024, rising to 2.8% annually
• Oil prices remain above $100 per barrel for both Brent and WTI crude due to ongoing Iran war tensions, while President Trump travels to Beijing for a summit with Xi Jinping focused on trade, rare earths, and geopolitics

Kevin Warsh, President Trump's nominee for Federal Reserve chair, faces a pivotal decision at the June Fed meeting regarding whether to submit an interest rate projection. His choice could reveal whether his policy stance aligns with Trump's preference for lower rates or with mainstream Fed thinking. Warsh may opt out of submitting a 'dot' entirely, an unprecedented move that would conceal his rate views during his initial months.

• Outgoing Governor Stephen Miran, whose dovish rate projections have been far lower than colleagues', will vacate the seat Warsh is taking, making any dovish stance by Warsh immediately apparent and raising independence questions
• Warsh could justify withholding his projection by pursuing changes to the Fed's Summary of Economic Projections process, consistent with his known distaste for forward guidance that he believes ties policymakers' hands
• The decision comes as Warsh faces a five-week timeline before the June 16-17 Fed meeting, with Senate confirmation, White House signature, and swearing-in all required before he can participate

The Philadelphia SE Semiconductor index has surged 64% since March 30, far outpacing the S&P 500's 17% gain, driven by AI infrastructure demand. However, the sector's 18% weighting in the S&P 500 means any correction could derail the broader market rally. Technical indicators and comparisons to the 1999-2000 tech bubble suggest the trade may be overextended, with some investors taking profits despite strong fundamental tailwinds.

• Semiconductor stocks now comprise 18% of the S&P 500's weighting, with semis and memory stocks accounting for 70% of the index's $5.1 trillion market cap gain in 2026 through Monday
• Worldwide semiconductor revenue is expected to rise 64% to $1.3 trillion this year, with S&P 500 semis companies projected to grow earnings by 95%, up from 62% expected at year-start
• The SOX index's relative strength index hit 85.5 on Friday, its most 'overbought' reading since the March 2000 tech bubble peak, while investor Michael Burry disclosed bearish bets on a semis ETF

China is strongly opposing the proposed U.S. MATCH Act, which would restrict Chinese chipmakers' access to critical semiconductor equipment from the U.S., Japan, and the Netherlands. Beijing has summoned U.S. diplomats, prepared countermeasures including a new 'Malicious Entity List' decree, and is expected to raise the issue during upcoming talks between Presidents Trump and Xi Jinping in Beijing.

• The MATCH Act targets key chipmaking tools from allied countries like ASML (Netherlands) and Tokyo Electron (Japan), with mechanisms to coerce allies to limit exports and requirements for licenses to service equipment in China
• China issued a decree on April 13 establishing a 'Malicious Entity List' that could be used to target those who promote or implement foreign extraterritorial measures, opening the door to legal action
• The bill passed the House Foreign Affairs committee with a 36-8 vote in late April after revisions following industry lobbying, though the White House has not publicly taken a position on the legislation

Kevin Warsh, nominated to replace Jerome Powell as Federal Reserve Chair, is expected to be confirmed this week with plans for significant reforms including changes to the Fed's balance sheet, inflation analysis, and communication strategies. However, his ambitious agenda faces practical constraints and will likely require gradual implementation rather than immediate policy shifts. Warsh takes over amid tension between Trump's demands for rate cuts and economic data showing persistent inflation above the Fed's 2% target.

• Warsh inherits a $6.7 trillion Fed balance sheet he once opposed and aims to reduce it, though experts doubt his theory that shrinking bond holdings would justify lower short-term interest rates
• With unemployment at 4.3% and inflation well above the 2% target, investors do not expect rate cuts before 2028 despite Warsh's arguments about AI-driven productivity gains potentially lowering prices
• Warsh may scale back communication tools like press conferences and the 'dot plot' rate projections, but former officials note these have become international standards that markets find useful

Japanese investors became net sellers of foreign stocks in April 2026 for the first time in four months, offloading 636.4 billion yen ($4.04 billion) in the largest monthly selloff since October 2025. The shift was driven by concerns over rising energy costs from the Iran war and broader inflation risks affecting overseas equities.

• Japanese trust accounts led the pullback with 1.85 trillion yen withdrawn from foreign stocks, the largest monthly outflow since June 2025
• U.S. consumer prices rose at the fastest pace in three years in April, contributing to caution on overseas investments
• First quarter data showed Japanese investors sold 4.95 trillion yen in U.S. bonds and 1.02 trillion yen in European bonds

European countries are projected to import 80% of their liquefied natural gas from the United States by 2028, according to research from the Institute for Energy Economics and Financial Analysis. This growing dependence on a single supplier poses energy security risks as the EU phases out Russian gas supplies. Researchers warn Europe risks creating a 'new energy dependence' and recommend investing in renewables to reduce exposure to volatile fuel markets.

• The U.S. is set to become Europe's biggest gas supplier in 2026, with the EU already importing 58% of its LNG from America in 2025, up from triple the volume in 2021
• Europe is expected to source two-thirds of its LNG from the U.S. in 2026 as it transitions away from Russian energy, though Russian LNG imports actually increased 16% in early 2026
• The EU has scheduled a full ban on Russian LNG imports for January 2027 and pipeline gas for September 2027, after banning short-term Russian LNG contracts in April 2026

China and the U.S. are considering extending a truce on Chinese rare earth export curbs at an upcoming summit, but Chinese customs data reveals Beijing continues to restrict shipments of strategic rare earths by approximately 50% since April 2025. The controls, imposed in retaliation for Trump's Liberation Day tariffs, have caused severe shortages and dramatic price increases for materials critical to defense, aerospace, semiconductors, and manufacturing, affecting the U.S. and allies like Japan and Germany.

• Exports of specialty rare earths (yttrium, dysprosium, terbium) remain down 50% since controls began in April 2025, despite overall rare earth export volumes rebounding
• Prices outside China have surged 4-5 times for dysprosium and terbium, and roughly 140-fold for yttrium, with magnet manufacturers paying 1.5 to 3 times more than before controls
• U.S. allies face severe impacts: Japan received only 4% of its previous dysprosium imports and Germany received none, while the White House had to intervene to secure approvals for a large U.S. defense contractor losing hundreds of millions monthly

U.S. crude oil inventories fell by 2.2 million barrels for the fourth consecutive week ending May 8, according to American Petroleum Institute data. While crude and distillate stocks declined, gasoline inventories rose by 502,000 barrels, indicating mixed demand trends in the U.S. energy market.

• Crude oil stocks dropped 2.2 million barrels, marking the fourth straight weekly decline
• Gasoline inventories increased by 502,000 barrels, contrasting with the broader drawdown trend
• Distillate inventories fell by 319,000 barrels during the same period

U.S. stocks fell on Tuesday, led by a sharp decline in semiconductors, as inflation data showed headline CPI rising to 3.8% in April—the highest in three years—while stronger-than-expected numbers lifted bond yields. The report indicates real wage growth has turned negative for the first time since 2023, with headline inflation potentially reaching 4% (double the Fed's target) as soon as next month.

• The Philadelphia Semiconductor index dropped as much as 6% before recovering half those losses, potentially due to high valuations after a 70% rally in six weeks
• U.S. 10-year Treasury yields rose 5 basis points across the curve with a weak auction showing a large tail and low bid-to-cover ratio
• UK long-term bond yields surged to the highest since 1998 amid political pressure on Prime Minister Keir Starmer following Labour Party election defeats, with sterling falling 0.5% as the biggest decliner among major currencies

April's Consumer Price Index surged to 3.8% annually, the hottest inflation reading since May 2023, driven by energy costs jumping nearly 18% year-over-year and gasoline up 28.4%. Core inflation accelerated to 0.4% monthly, nearly double the prior two months, signaling broader economic spread beyond energy. Despite inflation pressures weighing on consumer sentiment and most stocks, financial analysts Louis Navellier and Luke Lango remain bullish on AI infrastructure investments, particularly NAND flash storage providers benefiting from surging AI data center demand.

• Energy prices show no relief until October at earliest, with analysts expecting recovery timeframes to match disruption duration; sustained high oil prices create a 'tale of two markets' with AI stocks generating over 80% of S&P 500 year-to-date returns while the broader index excluding AI has gained less than 2%
• NAND flash storage demand is projected to grow over 20% in 2026 while supply increases only 15-17%, creating a structural imbalance; SanDisk has surged more than 3,500% over the past 52 weeks as AI infrastructure spending from Alphabet, Amazon, Meta, and Microsoft is now estimated at $725 billion by 2026, up from $670 billion projected earlier
• Non-AI companies face deteriorating conditions exemplified by Whirlpool reporting 'recession-level' U.S. appliance demand decline of 7.4% in Q1, with March alone down 10%; consumer sentiment hit the lowest reading since tracking began in 1952 as wages fail to keep pace with rising costs for gas, groceries, and rent