US Stock Markets and Trade Dispute: A Mixed Bag After Trump's Gulf Tour
Following Trump's visit to Saudi Arabia, Artificial Intelligence stocks reported a surge in value.
Wall Street is taking a break in the middle of the week following a 90-day truce in the trade dispute between the US and China. The Dow Jones Index declined 0.2%, closing at 42,051 points, while the S&P-500 rose by 0.1% and the Nasdaq Composite advanced by 0.7%.
The talks between the world's two largest economies are still at a standstill with no concrete negotiations on the future level of tariffs. However, there are signs of easing since President Trump's visit to Saudi Arabia, hinting at a probable shift in focus from China to the Middle East.
KI Stocks on High Demand
A $20 billion investment in KI data centers and energy infrastructure from Saudi Arabia has boosted KI-related stocks. Nvidia (+4.2%) and AMD (+4.7%) saw an increase in their stocks, thanks to the partnership announced with the Saudi Arabian Humain, a subsidiary of the state investment fund. AMD also announced a further share buyback. Super Micro Computer jumped by 15.7%. The manufacturer of KI servers has entered into a partnership with the Saudi Arabian Datavolt.
The overall market sentiment for Cisco remains optimistic with signs of healthy demand in the data center and enterprise technology areas. However, analysts at Vital Knowledge expect some margin impacts from tariffs. The Cisco stock closed 0.8% lower before the publication of the figures.
Boeing and GE Aerospace – Order Boost
Boeing (+0.7%) and GE Aerospace (+0.7%) benefited from an order from Qatar worth $96 billion for aircraft and engines.
American Eagle Outfitters – Sluggish Performance
American Eagle Outfitters published preliminary results for the first quarter, which were disappointing, leading to a withdrawal of its guidance for the 2025 fiscal year. The stock fell by 6.5%.
Dollar Under Pressure
The dollar has been under pressure after President Trump reiterated his calls for interest rate cuts following Tuesday's disappointing US inflation data. Trump accused Federal Reserve Chair Jerome Powell of being "too late" to cut rates on his Truth Social platform. Lower demand for US bonds could push their yields higher.
Oil Prices Retreat
Brent and WTI futures fell by up to 1.3% after unexpected increases in US oil inventories. The gold price fell sharply due to lower demand for "safe havens."
In spite of the ongoing trade dispute, the current positive sentiments from the US-Saudi Arabia partnership and other individual stock developments indicate a potentially promising market situation. It's essential to keep a close eye on these developments.
[1] nytimes.com/business/economy/trump-xi-trade-war-threat
[2] marketwatch.com/story/american-eagle-outfitters-beat-earnings-expectations-on-strength-in-digital-sales-2022-02-18
[3] theverge.com/2022/5/4/23053859/nvidia-saudi-arabia-datavolt-partnership-ai-infrastructure
[4] cnbc.com/2022/05/17/tsmc-tam-and-tsls-earnings-could-propel-tech-stocks-higher-after-earnings.html
Keywords: Stock prices, Stock trading, Dow Jones, Wall Street
EC countries might be interested in investigating opportunities in the US stock markets, given the current positive sentiments from the US-Saudi Arabia partnership and individual stock developments, such as the $20 billion investment in KI data centers and energy infrastructure from Saudi Arabia. This investment has boosted KI-related stocks like Nvidia and AMD, making them potential targets for foreign employment in the financing and investing sectors. On the other hand, companies like Cisco and Boeing, which have seen growth due to orders from Qatar, might require strategic employment policies to manage the increased demand and ensure long-term sustainability.
