With relatively few major macroeconomic developments to drive markets this week, investors refocused on AI and big tech, providing fresh momentum for U.S. equities. Renewed buying interest in large-cap technology and semiconductor stocks helped push the Nasdaq and S&P 500 higher, underscoring continued confidence in companies expected to benefit from continuing adoption of artificial intelligence.

So far this week, investor attention has been split between developments in UK politics, progress in Iran-related peace talks, and fresh news from the world’s largest technology firms.

This week, markets have been driven by the sharp drop in oil prices following the U.S.–Iran peace framework, the powerful relief rally in global equities led by tech and the SpaceX IPO, and shifting expectations ahead of new federal reserve chair, Kevin Warsh’s first monetary policy meeting.

This week, China announced that its trade surplus expanded by more than expected in May. In dollar terms, the surplus widened to $105.43 billion from $84.80 billion in April, driven by another strong month for exports, which rose 19.4% year-on-year.

A combination of renewed enthusiasm for AI, diverging manufacturing trends, and unresolved geopolitical tensions has set the tone for markets this week. Excitement in the technology sector followed reports that Anthropic, the artificial intelligence company behind ChatGPT rival Claude, is taking steps towards a US stock market listing.

Markets have experienced shifting sentiment so far in this holiday shortened week, with optimism around easing geopolitical tensions continuing to compete with caution as developments in the Middle East evolve.

So far it has been a mixed week for markets, with sentiment swinging between possible easing in geopolitical tensions in the Middle East, inflation concerns and some softer economic data.

Global markets have turned notably more cautious through the middle of the week. While first-quarter earnings have broadly surprised to the upside, particularly across technology, financials and industrials, markets are increasingly focused on higher energy prices and the possibility that central banks may need to keep interest rates elevated for longer.

This week, global markets have been boosted by renewed hopes of a peace deal between the US and Iran. On Wednesday indices across the UK and Europe jumped 2-3% while the S&P 500 in the US reached a new record high.

Markets have traded cautiously this week, with performance remaining fairly mixed as investors weigh shifting economic signals.

Over in China, Xi Jinping chaired a meeting of the Communist Party of China this week to assess the region’s current economic conditions and near-term growth outlook.