U.S. stocks edged higher on Thursday as Wall Street welcomed a fresh AI rally and investors watched a high-stakes summit between President Trump and Chinese President Xi Jinping. Optimism around AI demand, semiconductor spending, and easing trade rhetoric helped power another broad-based move higher across major indexes.
The Dow Jones Industrial Average surged more than 450 points to reclaim the 50,000 level for the first time since February. Meanwhile, the S&P 500 gained nearly 1%, and the Nasdaq Composite climbed around 1% as chip stocks rebounded sharply after Tuesday’s sell-off. Nvidia led the charge after reports that the U.S. approved additional H200 chip sales to Chinese firms, reigniting enthusiasm across the AI trade.
Market Movers:
- POET Technologies (POET) +24% — Shares soared after the company announced a major optical networking partnership with Lumilens that could generate more than $500 million in purchases over five years. Investors cheered the company’s growing role in AI data center infrastructure and next-generation photonics technology.
- Cisco Systems (CSCO) +14% — Cisco jumped after beating earnings expectations, raising guidance, and unveiling an AI-focused restructuring plan that includes cutting roughly 4,000 jobs. The company also boosted its AI infrastructure order forecast sharply higher, signaling accelerating enterprise demand tied to AI networking buildouts.
- Take-Two Interactive (TTWO) +6% — Shares gained as anticipation continued building around the upcoming launch of Grand Theft Auto VI later this year. Investors are betting the blockbuster title could drive a major holiday gaming cycle and lift spending across the broader gaming ecosystem.
- Doximity (DOCS) -24% — The healthcare technology stock plunged after issuing weaker-than-expected forward guidance despite posting a modest revenue beat. Investors appeared concerned about slowing growth trends and softer advertising demand across the healthcare sector.
- Enovix (ENVX) -19% — Shares tumbled as concerns over cash burn and manufacturing scale-up challenges overshadowed a quarterly revenue beat. While management highlighted progress in smartphone battery development and defense applications, investors focused on the company’s widening losses and delayed profitability timeline.
- Canadian Solar (CSIQ) -15% — The solar stock slid after issuing disappointing second-quarter revenue guidance that fell well below Wall Street expectations. Strong battery storage growth was not enough to offset concerns about weaker solar module demand and slowing near-term sales momentum.
AI Trade Roars Back as Nvidia Extends Momentum
AI stocks returned to the center of the rally after Nvidia rose more than 4% on news that additional H200 chip sales to Chinese firms received U.S. approval. The development helped soothe concerns about rising export restrictions and reinforced expectations for sustained global AI infrastructure demand. The rebound lifted semiconductor and hardware stocks after a volatile stretch earlier in the week.
Investors also focused on the upcoming public debut of AI chipmaker Cerebras Systems, which is expected to become the largest U.S. semiconductor IPO on record. The company is positioning itself as a challenger to Nvidia in the fast-growing AI inference market, adding fresh excitement to the sector. Meanwhile, major technology executives, including Nvidia CEO Jensen Huang, Tesla CEO Elon Musk, and Apple CEO Tim Cook, attended meetings in Beijing alongside President Trump, underscoring how central AI and semiconductor policy have become to U.S.-China relations.
Trump-Xi Summit Puts Trade and Rare Earths in Focus
Markets are also closely monitoring the Trump-Xi summit as investors look for signs of improving economic cooperation between the world’s two largest economies. Trade policy, AI, and access to critical rare earth minerals are expected to dominate discussions during the two-day meeting.
Analysts increasingly view China’s control over rare earth supply chains as a major geopolitical leverage point, particularly as demand rises for electric vehicles, semiconductors, defense systems, and AI hardware. Any progress on trade or resource access could help ease supply-chain concerns that have weighed on manufacturers and technology firms in recent months. At the same time, investors remain cautious about broader geopolitical risks tied to Iran and elevated oil prices, which continue to fuel inflation concerns globally.
Labor Market and Consumer Spending Remain Resilient
Fresh labor market data released Thursday showed initial jobless claims rose modestly last week but remained historically low overall. Continuing claims also edged higher, suggesting the labor market may be cooling slightly but remains relatively stable despite economic uncertainty.
Consumer spending trends also continue showing divergence across income groups. Bank of America data highlighted a growing “K-shaped” economy, where higher-income consumers continue spending aggressively on travel and discretionary purchases while lower-income households pull back amid higher fuel and living costs. That uneven spending environment remains an important theme for investors as inflation pressures and elevated interest rates continue reshaping consumer behavior.
Looking Ahead
The focus now shifts toward developments from the Trump-Xi summit, the trajectory of AI infrastructure spending, and the next wave of economic data that could influence Federal Reserve policy expectations. Investors will also continue monitoring oil prices and Middle East tensions, which remain a major source of inflation risk across global markets. Meanwhile, the AI trade appears to have regained momentum after a brief pause, with semiconductors, networking companies, and data center plays once again driving broader market gains. For now, the market’s message is clear: investors remain willing to aggressively buy into AI growth stories, even as geopolitical and inflation risks continue lingering in the background.