Investors focus on AI momentum amid tariff uncertainty
U.S. stock markets climbed on Wednesday, powered by Nvidia’s surge to a historic $4 trillion market valuation, even as geopolitical and trade tensions continued to escalate. President Donald Trump’s broadening tariff agenda, including a new 50% duty on copper and looming 200% levies on pharmaceuticals, sent ripples through commodities and currency markets but failed to derail the broader equity rally.
Despite the growing tariff threats, investors appear increasingly confident that inflation will remain under control. “The greatest fear was that these tariffs would spark major inflation and economic disorder. That hasn’t materialized,” said Oliver Pursche, senior VP at Wealthspire Advisors. His comments reflect a prevailing sentiment among traders who are tuning out daily trade war noise and betting on economic resilience instead.
Indexes rise, led by Nvidia’s AI dominance
The Nasdaq jumped 0.4% to 20,499.80, while the S&P 500 gained 0.16% to 6,235.46 and the Dow Jones inched up 0.07% to 44,272.15. Nvidia led the rally, becoming the first company to reach a $4 trillion market cap as its dominance in artificial intelligence continues to drive investor enthusiasm.
Globally, MSCI’s world equity index rose 0.34%, and Europe’s STOXX 600 climbed 0.68%, boosted in part by hopes that the EU and U.S. could finalize a trade deal outline in the coming days. Meanwhile, U.S. copper futures saw a wider premium over London prices after Trump’s tariff announcement triggered a surge in domestic copper demand and pricing.
Currency and bond markets reflect cautious optimism
The dollar index ticked up 0.03% to 97.58. The euro slipped 0.1% to $1.1712, while the dollar briefly reached a two-week high against the yen before settling at 146.36. Japan remains farthest from a trade agreement with the U.S., a factor that has impacted its currency’s performance this week.
Yields on U.S. Treasuries dipped, with 10-year notes falling 3.6 basis points to 4.381%, slightly below Tuesday’s peak of 4.435%. Traders are closely watching the Federal Reserve’s meeting minutes and a $39 billion bond auction for further clues on inflation expectations and investor appetite for long-dated debt.
Oil prices stable, EU bond yields flat
U.S. crude edged up 0.09% to $68.38 a barrel, while Brent rose 0.06% to $70.19. European bond markets remained largely unchanged, with Germany’s 10-year yield holding at 2.637% as investors await more clarity on both EU-U.S. trade negotiations and Fed policy direction.
