Market Overview: On May 7, U.S. stock markets closed significantly higher. The Dow Jones Industrial Average climbed more than 600 points, while the Nasdaq Composite and S&P 500 indices reached new record highs. Among the top 20 stocks by trading volume, AMD saw substantial gains after sharply raising its growth forecast for the CPU market. Popular U.S.-listed Chinese stocks also advanced broadly, with Baidu surging 11.37% and Alibaba rising 6.94%.
Commodities Review: Hopes for a ceasefire between the U.S. and Iran intensified, leading to a decline in crude oil prices. Conversely, London copper prices moved higher, and gold and silver posted significant gains. European equity markets rallied on rising expectations for a U.S.-Iran peace agreement, with airline stocks experiencing a strong uptick.
Macro Developments: Former U.S. President Donald Trump stated that Iran has agreed not to possess nuclear weapons and expressed that an agreement between the two nations is "very likely." He reiterated optimism about reaching a deal, described actions against Iran as "progressing smoothly," and emphasized a dual approach of pressure and negotiation. Trump also warned that Iran would face "larger scale" bombings if it does not agree to a peace deal. In other news, the U.S. Commerce Secretary testified behind closed doors regarding the Epstein case, with a committee chairman noting the testimony was not "100% truthful." U.S. Treasury Secretary Janet Yellen is scheduled to visit Japan next week for meetings with Prime Minister and other officials.
Iran's Response: A spokesperson for Iran's Foreign Ministry indicated that Tehran has not yet responded to the U.S. views on its 14-point proposal. Iranian authorities denied conducting any recent missile or drone operations against the UAE and asserted that U.S. military forces could not reopen the Strait of Hormuz using all available means. They confirmed that Iranian ports are prepared to provide standard maritime services and support, with sufficient supplies of petrochemical products available. Iran's President attributed distrust of the U.S. to its hostile actions.
Other Global Affairs: The European Union is advancing the implementation of a U.S.-EU trade agreement, though progress is slowed by disagreements over safeguard measures. Ukrainian President Volodymyr Zelenskyy stated that Ukraine will respond "in kind" to Russian attacks. Russia's Foreign Ministry called on relevant countries and organizations to evacuate personnel from Kyiv promptly. Israel claimed an attack on Beirut aimed to eliminate a Hezbollah commander, while Israeli Prime Minister confirmed the military action and Hezbollah reported causing Israeli casualties.
Corporate News: SpaceX estimates the cost of a new chip factory to be at least $550 billion. Anthropic and SpaceX announced a computing power agreement that includes space development. Warner Bros. Discovery reported a net loss of $2.9 billion, attributed to Paramount deal costs and restructuring. Anthropic's CEO noted an 80-fold growth in the first quarter, citing "computing power challenges." Tesla is recalling nearly 219,000 vehicles in the U.S. market. AI-driven demand is boosting data center needs, with Arm's revenue outlook slightly exceeding expectations. Google submitted a compliance plan to the EU to avoid fines in a news search case. Scale AI, backed by Meta, secured a $500 million AI contract with the Pentagon. JPMorgan Chase launched a new index tracking 6,400 U.S. private companies. Snap cited the Iran conflict impacting ad revenue, with Q1 results affected by geopolitical tensions. Sony acquired music copyrights for nearly $4 billion. Eli Lilly invested an additional $4.5 billion to expand its Indiana production base, inaugurating its first gene therapy plant. UK financial regulators initiated an antitrust investigation into Visa, Mastercard, and PayPal. AMD's stock hit a new high, fueled by optimism over AI demand, sparking a global rally in chip stocks. Rheinmetall is seeking a €12 billion rescue package for a German frigate project.
Commentary: Despite polling pressure, Trump maintains a firm grip on influence within the Republican party. The U.S. is reportedly considering using oil reserves from military bases to replenish strategic reserves. Iranian official media IRIB reported that Iran issued guidance to commercial ships in the Strait of Hormuz. In U.S. bond markets, expectations for a U.S.-Iran deal pushed Treasury prices higher, widening swap spreads. A Federal Reserve official signaled caution regarding inflation and consumer behavior. Soaring fuel prices led U.S. airlines to incur an additional $1.8 billion in costs in March. Trade friction resulted in a 63% decline in U.S. sales of Canadian spirits. Global debt levels approached a record $353 trillion. A New York Fed study found that surging gasoline prices are exacerbating K-shaped divergence in the U.S. economy. Cutting-edge AI models competing in stock trading mostly resulted in losses, suggesting the most challenging financial tasks still require human expertise.
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