Major U.S. stock indices closed higher on Wednesday, with the Dow Jones Industrial Average climbing back above the 50,000-point mark. U.S. President Donald Trump stated that negotiations with Iran over its nuclear program have entered their "final stage," but warned that the U.S. would not rule out renewed military action, including potentially larger-scale attacks, if Iran refuses to reach a deal. NVIDIA reported first-quarter earnings that exceeded expectations; however, its stock price fell approximately 1.6% in after-hours trading.
**U.S. Stocks** The Dow Jones Industrial Average rose by 645.47 points, or 1.31%, to close at 50,009.35. The Nasdaq Composite gained 399.65 points, or 1.54%, finishing at 26,270.36. The S&P 500 increased by 79.31 points, or 1.08%, ending at 7,432.92. Among notable movers, Micron Technology (MU.US) advanced 4.7%, NVIDIA (NVDA.US) rose 1%, Tesla (TSLA.US) gained 3%, and Intel (INTC.US) surged 7%. The Nasdaq Golden Dragon China Index declined 0.4%.
**European Stocks** Germany's DAX 30 index increased by 313.83 points, or 1.28%, to 24,742.00. The UK's FTSE 100 rose by 103.66 points, or 1.00%, to 10,434.21. France's CAC 40 gained 135.66 points, or 1.70%, to 8,117.42. The Euro Stoxx 50 climbed by 120.94 points, or 2.07%, to 5,973.90. Spain's IBEX 35 advanced by 382.95 points, or 2.17%, to 18,053.05. Italy's FTSE MIB added 826.61 points, or 1.71%, to 49,181.50.
**Asian Markets** Japan's Nikkei 225 fell 1.23%. South Korea's KOSPI declined 0.86%. India's Sensex edged up 0.16%. Singapore's Straits Times Index dropped 0.54%.
**U.S. Dollar Index** The U.S. Dollar Index, which measures the dollar against a basket of six major currencies, fell 0.24% to settle at 99.090. By the close of New York forex trading, one euro traded at $1.1631, up from $1.1604 the previous day. One pound was worth $1.3442, up from $1.3397. One dollar bought 158.84 Japanese yen, down from 159.06. It traded for 0.7868 Swiss francs, down from 0.7892, and 1.3749 Canadian dollars, down from 1.3750. One dollar was worth 9.3324 Swedish kronor, down from 9.4055.
**Cryptocurrencies** Bitcoin hovered near $77,000, trading at $77,384.85. Ethereum showed little movement at $2,106.33.
**Crude Oil** The price of NYMEX July West Texas Intermediate (WTI) crude oil futures fell by $5.89 to settle at $98.26 per barrel, a decline of 5.66%. July Brent crude futures on the ICE fell by $6.26 to settle at $105.02 per barrel, down 5.63%.
**Precious Metals** Spot gold traded back above $4,500, at $4,543.92 per ounce. Spot silver was at $75.893 per ounce.
**Macro News** * **Fed Warns of Upside Inflation Risks:** The Federal Reserve's meeting minutes indicated that staff economic projections were slightly stronger than those from the March meeting. Real GDP growth is expected to be modestly above potential in the coming years. The unemployment rate is projected to be near staff estimates of its longer-run level this year and next, dipping slightly below it around 2028. Staff's inflation forecast for this year was revised higher than in March due to recent data, higher energy prices, and anticipated impacts from other Middle East conflicts pushing consumer price inflation up. Inflation is expected to begin slowing after the first half of the year as conflict-related effects fade and the pass-through of higher tariffs diminishes, approaching 2% by the end of next year. Overall, risks to the employment and real GDP growth forecasts were seen as tilted to the downside, while risks to the inflation forecast were tilted to the upside. With inflation having been significantly above 2% for the past five years, Middle East conflicts could push it higher, and new price pressures were emerging in categories unrelated to tariffs or energy. Therefore, staff viewed the risk of inflation proving more persistent than expected as a key focus. * **Fed Minutes: Current Policy Stance May Need to Be Maintained Longer:** The minutes showed that regarding the monetary policy outlook, participants generally agreed that persistently high inflation and uncertainty about the duration and economic impact of Middle East conflicts could necessitate maintaining the current policy stance for longer than previously anticipated. Some participants emphasized that if clear signs emerged that the disinflation trend was steadily resuming or if the labor market showed more pronounced weakness, it might be appropriate to lower the federal funds rate target range. However, most participants noted that if inflation remained persistently above 2%, some policy tightening might be required. In response to this possibility, many expressed a desire to remove language from post-meeting statements hinting at a potential future easing bias. Participants noted that policy is not on a preset course and future decisions will be made meeting-by-meeting. * **Morgan Stanley: AI M&A Wave Shows "Full Spectrum" Development:** Wally Cheng, Morgan Stanley's global head of technology M&A, stated that as companies race to fill technology gaps in areas like chips, power, networking, and infrastructure, M&A activity in artificial intelligence is spanning all deal sizes and expanding across multiple industries. Cheng said, "I think deal activity will be across the full spectrum, including private and public companies." While semiconductors powering AI attract attention for their "tech miracle" status, the infrastructure around these chips—including networking, storage, power, and real estate—also holds significant value. Cheng noted that valuations in AI remain "very difficult," requiring a balance between "visionary unicorns and rainbow scenarios" and actual execution risk. Tammy Kiely, Evercore's senior managing director of technology investment banking, echoed similar sentiments, stating potential acquirers must assess the value they can create while weighing the cost of missing opportunities. * **Sources: ECB June Rate Hike Almost Certain, July Action Unclear:** Four sources indicated that a European Central Bank interest rate hike in June is almost certain, but the bank is taking a cautious stance on future actions, aiming to temper market expectations for a swift follow-up move in July. The ECB held rates steady in April but had internally debated a hike and signaled action was possible in June due to persistently high energy costs. Sources said the inflation outlook is currently evolving towards the bank's envisaged "adverse scenario," and with no signs of de-escalation in Iran, the bank must act at its next meeting. With price growth at 3%, well above the 2% target, and following its policy shift signal, the bank also needs to safeguard its credibility. They added, "Even if a peace deal were reached before the meeting, there is no guarantee it would hold, and energy prices would remain elevated for some time as markets take time to normalize." However, subsequent hikes are not seen as urgent because current price pressures are much milder than in 2022, and the second-round effects of this price spike have not yet materialized. Various factors suggest the bank might defer any July plans until new projections are available in September, unless the inflation outlook deteriorates significantly. * **Lazard CEO: U.S. Economy Has Become an "AI Bet":** Lazard CEO Peter Orszag stated that the development of artificial intelligence and its boost to the stock market mean the U.S. economy has essentially become a "highly levered bet" on the success of AI. Orszag noted, "If you look at the sources of U.S. economic growth, it's coming from AI and high-income consumers," who also benefit from the AI-driven stock market rally. He said, "At this stage, the U.S. economy is a levered bet on AI. Like many bets, it could work or it could not, but it's a good bet to be making." Orszag warned the economy could face headwinds as businesses and labor adapt to AI-driven changes: "Labor markets are good at dealing with 'fast small shocks' or 'slow big shocks'—and this could be a 'fast big shock'."
**Corporate News** * **NVIDIA Reports Strong Results, Announces $80B Buyback, Yet Shares Fall:** NVIDIA (NVDA.US) reported after Wednesday's market close. Its Q1 FY2027 revenue was $81.6 billion, exceeding market expectations of $78.672 billion. Data center revenue was $75.2 billion, surpassing the expected $72.8 billion. The company also announced an $80 billion stock repurchase program and increased its quarterly cash dividend from 1 cent to 25 cents per share. Furthermore, spending on NVIDIA's data center products, its primary revenue source, shows no signs of slowing. For Q2, NVIDIA forecasts revenue of approximately $91 billion (plus or minus 2%), compared to a market consensus median of $86.788 billion, though some estimates had reached as high as $96 billion. This outlook disappointed some investors accustomed to the company consistently surpassing expectations. The company's dominance in AI computing is also facing its first major challenge as numerous chipmakers attempt to capture market share. Following the earnings release, NVIDIA's stock fell about 3% in after-hours trading before paring losses to trade flat. * **SpaceX Files for IPO, Details Finances but Withholds Size and Valuation:** SpaceX, led by Tesla (TSLA.US) CEO Elon Musk, unveiled plans for what could be the largest IPO in history, providing investors with comprehensive financial details of the company spanning rocket launches, satellite broadband, and AI businesses. According to a prospectus filed with the SEC on Wednesday, the company reported sales of $47 billion and an operating loss of $19 billion for the first three months of this year. Musk will hold 85.1% of voting power post-IPO. The company also plans to pursue mining operations on near-Earth asteroids. The filing also revealed that Anthropic will pay SpaceX $1.25 billion monthly through May 2029. While the offering size and proposed valuation were not disclosed, media reports previously indicated SpaceX had discussed raising about $75 billion at a valuation of $1.75 trillion. SpaceX will list on the Nasdaq under the ticker symbol SPCX.
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