Evening Market Recap - Thursday, 21-May

Why It Matters

The geopolitical ceasefire chatter and Nvidia-led AI optimism meaningfully shifted risk sentiment, impacting rates, oil and sector leadership; investors should watch earnings, inflation signals and labor trends for whether this rotation is sustainable.

Summary

U.S. stocks were mostly higher Thursday as semiconductors, big tech and small-cap momentum names led gains while software, banks and energy lagged. Markets reacted to reports of a potential mediated ceasefire in the Middle East, which drove a Treasury rally, oil sell-off and slightly lower Fed hike expectations. Nvidia’s strong earnings and raised guidance fueled AI demand optimism, supported by positive Anthropic revenue reports and related supplier and quantum-chip wins. Mixed macro data showed a four-year high in manufacturing PMI but softer services, rising input costs and signs of weakening employment.

Original Description

US equities were higher in Thursday trading. Stocks saw an afternoon rally following a Saudi media report that a mediated cease fire agreement could be announced later today. Beyond geopolitics, the momentum trade continued rebound after the recent selloff. It was helped in part by optimism about the AI demand narrative.