US Stock Markets Mixed on KI Stocks Following Trump's Saudi Arabia Visit: A Closer Look
Stock prices for AI companies surge following Trump's visit to Saudi Arabia
The trade dispute between the United States and China is taking a backseat, as Wall Street traders eagerly await the next move. Amidst this anticipation, recent developments from the Middle East are stirring the pot. Let's delve into the recent market trends and the impact of the US President's Saudi Arabia trip.
After a brief respite, the Wall Street saw a slight downturn mid-week. The Dow Jones Index closed 0.2 percent lower at 42,051 points, while the S&P-500 rose by 0.1 percent. The Nasdaq Composite, however, advanced by 0.7 percent.
The trade conflict between the US and China remains a hot topic, with a hint of easing signs since the weekend. Yet, there's no tangible progress on future tariff levels, with a deadline of 90 days before the originally high tariffs take effect.
During his visit to Qatar, President Trump announced the "largest order in history" for Boeing, which saw a 0.7% increase. Meanwhile, the market was keeping an eye on Cisco's third-quarter earnings, set to be released after market hours. According to analysts, investors are optimistic about Cisco, thanks to healthy demand in the data center and enterprise technology areas, solid capital returns, and a reasonable valuation. However, some margin impacts from tariffs are expected. Cisco's stock, consequently, closed 0.8 percent lower ahead of the earnings release.
AI-related stocks saw a surge, following Saudi Arabia's announcement of $20 billion investments in AI data centers and energy infrastructure from the US. Nvidia (+4.2%) and AMD (+4.7%) benefited from the partnership announced with Saudi Arabia's Humain, a subsidiary of the sovereign wealth fund. Super Micro Computer jumped 15.7 percent due to a partnership with Saudi Arabia's Datavolt.
Apple's stock dipped slightly following Foxconn's report of a sharp increase in profits in the first quarter but a lowered sales forecast due to tariff risks. Foxconn, a significant player in assembling Apple's iPhones, experienced a surge because customers accelerated deliveries to the US in anticipation of potential US import tariffs.
Meanwhile, Qatar Airways placed orders for aircraft and engines from Boeing and GE Aerospace, worth $96 billion, according to the White House announcement. Following this, Boeing (+0.7%) and GE Aerospace (+0.7%) saw an increase in their stock prices.
American Eagle Outfitters reported disappointing preliminary results for the first quarter and revised its 2025 business outlook downward, leading to a 6.5 percent drop in its stock price.
Crude oil prices retreated after recent strong gains, with Brent and WTI futures falling by up to 1.3 percent following an unexpected rise in US oil inventories. Although no concrete data is available, the ease in US-China trade tensions could have contributed to the initial oil price surge.
Oil prices have been somewhat balanced, with traders keeping a close eye on geopolitical and trade developments. Meanwhile, gold prices plummeted by 2.1 percent due to decreased safe-haven demand. On the bond market, yields fell, with the yield on 10-year notes rising by 4 basis points to 4.54 percent.
Stay tuned for more updates and insights as we monitor the various developments shaping the global market landscape.
EC countries may consider investing in the stock-market, particularly AI-related stocks, as the Middle East, notably Saudi Arabia, is increasing its employment policy towards technology and infrastructure development, leading to a surge in related stock prices. The finance ministry in these countries might also be interested in the positive impact of these investments on employment policy within their jurisdictions.
In parallel, Wall Street traders might closely observe the earnings and future prospects of US tech companies, such as Cisco, given their market performance and anticipation of margin impacts from tariffs, when formulating their stock-market investing strategies.
