The US market: an overview and forecast for May 14th. Quotes are driven by foreign policy news

Investors’ attention will remain focused on the continuation of negotiations between Donald Trump and Xi Jinping. The first day of the summit proceeded in a constructive manner. The Chinese leader confirmed progress on trade issues, while the U.S. president positively assessed the prospects for bilateral relations. An extension of last year’s trade truce and an increase in China’s purchases of U.S. agricultural products and energy resources are expected.

The parties are also working on reducing tariffs on non-strategic goods worth around $30 billion. Washington seeks to stabilize imports of rare earth metals from China, which are critically important for the production of electric vehicles, defense equipment, and semiconductors. In response, Beijing insists on easing U.S. export controls on chip manufacturing equipment and advanced semiconductors.

An additional point of market interest is a potential agreement with Boeing (BA) for the delivery of around 500 Boeing 737 MAX aircraft and a batch of wide-body planes equipped with GE Aerospace (GE) engines. Factors restraining the market include disagreements over the Taiwan issue, which Xi described as the most sensitive item on the bilateral agenda. Investor sentiment is also negatively affected by Beijing’s unwillingness to pressure Tehran as part of U.S. efforts to resolve the Middle East conflict. Secretary of State Marco Rubio stated his intention to persuade the Chinese side to participate more actively in the peace process. However, analysts assess the likelihood of significant concessions from China as low, given the strategic importance of its relations with the Islamic Republic.

The International Energy Agency (IEA) raised its forecast for the global oil supply deficit this year to 3.9 million barrels per day. Since the start of the U.S. military operation in the region, the cumulative disruption of oil supplies from Persian Gulf countries has exceeded 1 billion barrels. At the same time, OPEC revised its 2026 oil demand growth forecast downward from 1.4 million barrels per day to 1.2 million.

The key macroeconomic release this Thursday will be April retail sales data. Consensus expects overall retail sales growth of 0.6% month-over-month and core sales growth (excluding automobiles) of 0.7% month-over-month. Control group sales are expected to rise by 0.4% month-over-month (March: +1.7%, +1.9%, and +0.7%, respectively). Freedom Broker analysts forecast growth of 0.3% and 0.4% month-over-month for the headline and core indexes, respectively, with control group sales increasing by 0.2% month-over-month. We also expect automobile sales to decline by 0.5% month-over-month and sales of furniture, electronics, apparel, and personal care products to fall by 0.4% month-over-month after their significant increase in March. Overall figures will be supported by a 2.6% month-over-month increase in gas station sales. Although nominal consumer activity remains strong, a significant portion of it is attributable to expenses related to the sharp rise in gasoline prices.

As usual on Thursdays, weekly jobless claims data will be released. Consensus for initial claims stands at 205 thousand versus 200 thousand the previous week. Continuing claims are expected at 1.78 million compared to 1.766 million previously.

Before the opening bell, quarterly results will be reported by Intuitive Machines (LUNR), Viking Holdings (VIK), Bitdeer Technologies (BTDR), Nova (NVMI), Klarna (KLAR), and Legence (LGN). After the market close, reports are expected from Applied Materials (AMAT), Nu Holdings (NU), Figma (FIG), Globant (GLOB), and Credicorp (BAP).

U.S. equity index futures are trading moderately higher, reflecting increased risk appetite. We assess the risk balance for the upcoming session as moderately positive amid elevated volatility. We expect the S&P 500 to trade within the 7400–7500 point range.

Premarket highlights

· NVIDIA (NVDA) shares are up approximately 3% following news that the company received approval to sell H200 chips to several Chinese firms, including Alibaba (BABA), Tencent (TCEHY), ByteDance, JD.com (JD), as well as distribute them through Lenovo (LNVGY) and Foxconn. Given NVIDIA’s significant weighting in key benchmarks, this could set a positive tone for stock index performance during the main trading session.

· Cisco Systems (CSCO) shares surged nearly 20% following the quarterly release. Revenue increased 12% year-over-year to $15.84 billion, exceeding average expectations. Orders for AI infrastructure from hyperscalers have already reached $5.3 billion, with a full-year target above $9 billion.

· Investors are closely watching the IPO of AI chipmaker Cerebras Systems, which priced at $185 per share, above the forecast range. The issuer raised $5.55 billion at a fully diluted valuation of $56.4 billion. Cerebras positions its Wafer Scale Engine 3 as an alternative to NVIDIA GPUs. In January, the company signed a contract worth more than $20 billion with OpenAI for 750 MW of computing capacity.

· Doximity (DOCS) shares fell about 12% after the market close. The company reported adjusted earnings per share of $0.26 versus consensus expectations of $0.28. Its revenue guidance for fiscal year 2027 projects revenue in the range of $664–676 million, compared to the market consensus of $697.4 million.

· Enovix (ENVX) shares are down 13%, although the company’s quarterly revenue and profit exceeded forecasts. Investor disappointment stemmed from the lack of specifics regarding the timeline for smartphone battery qualification with its largest customer.

· Kodiak Gas Services (KGS) shares declined 5% after announcing a $750 million secondary offering. The proceeds will be used for general corporate purposes, partial repayment of a credit facility, and investments in power generation equipment.

· Aeluma (ALMU) shares plunged more than 18% following earnings results. Revenue totaled $1.22 million versus consensus expectations of $1.35 million. Full-year guidance was revised from $4–6 million to $4.2–4.6 million due to delays in contract signings and the impact of the shutdown.

Market recap

U.S. equity markets closed mixed on May 13. The S&P 500 and NASDAQ 100 gained 0.58% and 1.04%, respectively, reaching new highs. The Dow Jones declined 0.14%, while the Russell 2000 edged up 0.04%.

The equal-weighted S&P 500 lagged the traditional benchmark by approximately 100 basis points, indicating that gains were concentrated in the largest-cap stocks.

The rally in semiconductors and memory chip stocks continued. The “Magnificent Seven,” with the exception of Microsoft (MSFT: -0.63%), closed higher, with Alphabet (GOOGL: +3.94%) posting the strongest performance.

The IT sector (XLK: +0.94%) and telecommunications (XLC: +0.78%) led gains across the broader market. Utilities (XLU: -1.15%), financials (XLF: -1.14%), and real estate (XLRE: -0.83%) were among the laggards. Pressure on rate-sensitive sectors was linked to concerns that tighter monetary policy may persist amid accelerating inflation.

The release of the April Producer Price Index (PPI) surprised market participants. Headline PPI rose 1.4% month-over-month, the largest increase since March 2022, versus consensus expectations of 0.5%. The prior month’s reading was revised down from +0.7% to 0.5%. Core PPI (excluding food and energy) increased 1.0% month-over-month compared to an average forecast of 0.3%, while March’s figure was revised up to 0.2%. High energy prices made a substantial contribution to the acceleration in inflation. In particular, the gasoline index rose 15.6% month-over-month, consistent with the core CPI data published the previous day.

Despite inflation rising above expectations, the secondary Treasury market showed relative resilience, while signals from the primary market were weaker. Yields on 10-year U.S. Treasuries moved lower after reaching their highest level since July 2025, although the yield curve showed signs of steepening. A $25 billion auction of 30-year bonds recorded the lowest bid-to-cover ratio since November and marked the first issuance of long-duration bonds with yields above 5% since August 2007.

Boston Fed President Susan Collins described the current monetary policy stance as appropriate and allowed for the possibility of slightly tighter policy. Minneapolis Fed President Neel Kashkari emphasized the need to slow inflation to the 2% target and warned against shifting policy benchmarks. Earlier, Kashkari and Dallas Fed President Lorie Logan voted against the dovish bias in the communiqué from the May FOMC meeting.

The participation of NVIDIA (NVDA: +2.29%) CEO Jensen Huang in the negotiation process between China and the U.S. was interpreted by the market as a signal that H200 chip supplies were under discussion. Following confirmation that sales of these products to several Chinese companies had been approved, that signal can now be considered materialized.

Corporate news

· Tower Semiconductor (TSEM: +22.61%) reported quarterly revenue and earnings above consensus expectations, while second-quarter guidance also exceeded average forecasts. Management cited stable demand and confirmed commitments from major silicon photonics (SiPho) customers through 2027.

· AI infrastructure provider Nebius Group (NBIS: +15.72%) delivered first-quarter results significantly above market expectations. The company secured up to 1.2 GW of capacity for a new AI data center in Pennsylvania and raised its annual guidance for deployed capacity.

· The U.S. Federal Trade Commission (FTC) approved the sale of EchoStar’s (SATS: +2.98%) wireless spectrum assets to AT&T (T) and SpaceX.

· Wix.com (WIX: -27.1%) reported first-quarter revenue, margins, and free cash flow below consensus expectations. Management maintained its full-year billing and revenue guidance but lowered its free cash flow margin outlook. Shares came under pressure due to weak partner segment performance and delays in launching new product production because of the conflict with Iran.

· Dynatrace (DT: -11.43%) generated fourth-quarter revenue and earnings per share slightly above consensus. Its guidance for annual recurring revenue (ARR) for fiscal year 2027 also exceeded average expectations. However, analysts focused on the modest ARR beat and the lack of acceleration in NNARR metrics.

· Oklo (OKLO: -5.39%) reported a larger-than-expected operating loss for the latest reporting period, although the company held $2.5 billion in cash and liquid securities at quarter-end. In addition, the U.S. Nuclear Regulatory Commission (NRC) approved the design plan for the Aurora-INL reactor. The company plans to bring its Texas test reactor to criticality by July 4.