Latest From Trump-XI China Summit: 8 Key Items Shaping the Stock Market Thursday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive market open later this morning.

1. US efforts to end the war with Iran were dealt a setback after a commercial vessel was apparently seized by unauthorized personnel near the United Arab Emirates, increasing uncertainty over control of the critical Strait of Hormuz… Tehran continues to resist US demands to reopen Hormuz and says it will only do that if Washington ends a naval blockade on Iranian ports. It’s also insisting that the US unfreezes billions of dollars of Iranian assets and lifts sanctions… New US intelligence assessments show Iran has operational access to 30 of its 33 missile sites along the Hormuz strait and has retained roughly 70% of its prewar missile stockpile… (Bloomberg)

Amid numerous headlines surrounding initial summit conversations between President Trump and China’s Xi Jinping, the U.S.-Iran conflict looks set to continue. Reports indicate the two discussed Iran, with the White House saying China agreed that the Strait of Hormuz should remain a free waterway and agreed that Iran shouldn’t have a nuclear weapon. However, there was no indication, at least so far, that China is prepared to do more.

2. The April Retail Sales report will be out at 8:30 a.m. ET, and the market is calling for a 0.5% sequential increase. We’ll look at the headline data, the Retail-only figures and the various categories on a year-over-year basis and a year over year trailing three-month basis. That will help prepare us for the coming wave of retailer earnings in the next few weeks.

Could we see an upside surprise? Quite possible. Internal data from Bank of America (BAC) showed that spending growth was strong in April:

Total credit and debit card spending per household rose 4.8% year-over-year (YoY), up from 4.3% YoY in March. Excluding gasoline, card spending was still a strong 4.0% YoY. However, spending growth did slow in April from March across multiple discretionary “nice-to-have” categories.

3. Cisco Systems Inc. gained as much as 22% in premarket trading after the company delivered a better-than-anticipated sales forecast and announced plans to cut thousands of jobs, an attempt to focus on the fast-growing AI market. Revenue will be $16.7 billion to $16.9 billion in the fiscal fourth quarter, which runs through July, the company said in a statement Wednesday. Analysts estimated sales of $15.8 billion, according to data compiled by Bloomberg. (Bloomberg)

Impressive, but what we get more excited about — because it confirms our thinking about the relationship between rising AI adoption and usage and the demand for networking infrastructure — is Cisco now targeting $9 billion in orders from hyperscalers this year, up from its prior target of $5 billion. We see this very supportive for our positions in Marvell (MRVL), Broadcom (AVGO), and Arista Networks (ANET) as well as Nvidia (NVDA).

Speaking of Nvidia…

4. The U.S. has cleared around 10 Chinese firms to buy Nvidia’s second-most powerful AI chip, the H200, but not a single delivery has been made so far, three people familiar with the matter said, leaving a major technology deal in limbo as CEO Jensen Huang seeks a breakthrough ‌in China this week. (Reuters)

The stakes are high, given that China once accounted for 13% of Nvidia’s total revenue, and CEO Jensen Huang previously estimated the country’s AI market alone would be worth $50 billion this year. Now to see China’s response as the Trump-Xi summit continues.

5. Chipmaking equipment maker Applied Materials will report its second-quarter earnings Thursday afternoon amid two competing trends. Its high-end equipment is essential to the buildout of new chip manufacturing capacity in the artificial-intelligence investment boom, but Chinese sales growth is flagging after years of strength… Wall Street analysts expect the company to report $2.68 in adjusted earnings per share, up from $2.39 last year. Revenue is seen at $7.7 billion, rising 8% year-over-year. (Barron’s)

It’s no secret chip industry demand has been tightening, and companies are shoring up capacity needs with multi-year alignments. This bodes well for higher capital spending levels by key players, including Taiwan Semi (TSM). On Thursday morning, TSM updated its outlook for the global semiconductor market, now calling for it to exceed $1.5 trillion by 2030, topping its previous forecast of $1 trillion.

6. On Wednesday evening, Cerebras announced that shares had been priced at $185, above the projected range the company announced on Monday, and up 54% from the midpoint of the initial range laid out earlier this month… Cerebras sells servers that hold its chips, and also rents them out in the cloud. Though cloud services were just 30% of 2025 sales, it’s where the company’s business model is headed. It had a backlog of $24.6 billion at the end of last year, and over $20 billion of that was a single cloud deal with OpenAI which commenced in February. (Barron’s)

The pricing of Cerebras’s IPO points to the robust demand for chip stocks participating in the AI and data center buildout, no question about it. For us, the next phase — post IPO trading — will be what we monitor as an indicator for the IPO market and what that could mean for our shares of Morgan Stanley (MS), Bank of America and SuRo Capital (SSSS).

7. Economic data today per TipRanks: Initial & Continuing Jobless Claims (Weekly), Retail Sales (April), Import/Export Prices (April), Business Inventories (March), EIA Natural Gas Inventories (Weekly)

8. Companies reporting today per TipRanks: AM – Canada Goose (GOOS), Canadian Solar (CSIQ), Klarna (KLAR), Wolverine (WWW), Yeti Holdings (YETI). PM – Applied Materials (AMAT), Bath & Body Works (BBWI), Flowers Foods (FLO), Kohl’s (KSS), Ross Stores (ROST)

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long AMAT, ANET, AVGO, BAC, MRVL, MS, NVDA and SSSS shares.