US markets closed higher for the fourth consecutive session. The S&P 500 rose 0.41% to finish at 5,916.93, while the Dow Jones climbed 271 points, or 0.65%, to 42,322.75. The Nasdaq lagged, dipping 0.18% to end the day at 19,112.32.
The rally followed last weekend’s trade talks between Treasury Secretary Scott Bessent and Chinese officials, which led to a temporary rollback of tariffs. That shift has helped soothe inflation fears and provided a short-term boost to risk assets.
Tech diverges as AI delays hit sentiment
Tech giants have largely powered this week’s gains, with Nvidia and Tesla each up about 15%, and Amazon and Alphabet not far behind. Meta Platforms, however, reversed course, falling 4% after reports it will delay the rollout of its flagship AI model, known as “Behemoth.” The delay triggered a broader pullback in AI-related names, with Nvidia down 1.2% on the day and the Nasdaq slipping into the red.
Still, for the week so far, the Nasdaq is up 6.6%, followed by a 4.5% gain in the S&P 500 and a 2.6% rise for the Dow.
Powell flags structural inflation risk
Federal Reserve Chair Jerome Powell warned Thursday that the US may be entering a period of more persistent supply shocks, which could make inflation more volatile and keep interest rates elevated over the long term. Speaking at a policy conference in Washington, Powell said the Fed’s current framework may need revision to reflect these emerging risks.
While inflation expectations remain anchored, Powell cautioned that “higher real rates” may become the norm, complicating the central bank’s ability to respond quickly to downturns. His remarks come as traders increasingly price in rate cuts for later this year following a surprise 0.5% drop in wholesale prices last month.
TikTok under pressure in Europe
Meanwhile, in Europe, regulators formally charged TikTok with breaching the Digital Services Act. The European Commission accused the social media platform of failing to provide required transparency around advertising — including who paid for ads, who was targeted, and what content was shown.
TikTok’s parent company, ByteDance, could face fines of up to 6% of global turnover if the findings are upheld. The case adds to broader scrutiny of the platform’s influence over elections and user safety, particularly in Romania where a separate investigation into disinformation campaigns is ongoing.
Oil retreats as Iran deal talks gain traction
Oil prices fell sharply as President Trump signalled the US is close to securing a nuclear deal with Iran. Brent crude closed at US$64.66, while WTI dropped to US$61.75 — both down around 2.2%. An agreement could open the door to significantly more Iranian oil exports, deepening a potential supply glut.
Markets now look ahead to next week’s Fed minutes and further signals from policymakers on the timing of any rate adjustments.
Futures and the dollar
One Australian dollar is buying 64.03 US cents.
The SPI futures are pointing to an 83 point rise.
