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Japan leads stock rally as Iran hopes and AI lift sentiment

US and European equities rallied on Wednesday as signs of possible progress in talks between Washington and Tehran and fresh enthusiasm around artificial intelligence buoyed sentiment, with Wall Street indices closing at record highs. Asian markets were also trading firmly higher on Thursday, led by a surge in Japanese equities that pushed the Nikkei 225 above 63,000 for the first time. The US dollar was broadly stable, while oil prices retreated sharply midweek with Brent crude trading around USD 102 per barrel and West Texas Intermediate (WTI) at USD 95. 

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Tokyo
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Japanese equities rallied on Thursday, with the Nikkei 225 climbing more than 6% to a record above 63,000 points for the first time. The advance came as investors focused on signs that Washington and Tehran could still reach an agreement. Gains were led by technology, materials and financial shares, with SoftBank (+18.4%) among the standout performers. Elsewhere in the region, Korea’s Kospi was trading 1.6% higher and Australia’s S&P/ASX 200 was up 0.8%. Hong Kong’s Hang Seng Index gained 1.4%, while mainland China’s CSI 300 was trading 0.4% higher.

US stocks rise on AI enthusiasm

US stocks extended gains on Wednesday as easing Middle East tensions and renewed enthusiasm for artificial intelligence lifted sentiment. The Dow Jones Industrial Average rose 1.2% to 49,910.59 points, the S&P 500 gained 1.5% to a record 7365.12, and the Nasdaq 100 advanced 2.1% to an all-time high of 28,599.17. Optimism was supported by comments from US President Donald Trump on talks with Iran and by strong corporate news, with chipmaker AMD, server maker Super Micro Computer, Google parent company Alphabet and ride-hailing group Uber among the notable gainers. Corning shares surged 12% on Wednesday after the glass and optical fibre maker announced a multiyear partnership with Nvidia to expand US production capacity for optical connectivity and fibre used in AI infrastructure.

US private payrolls beat forecasts

In macroeconomic data, US private employers added 109,000 jobs in April, ADP data showed on Wednesday, up from 61,000 in March and stronger than the market had expected. Annual pay growth for workers staying in their jobs eased to 4.4% from 4.5%, while hiring was led by education and health services, which added 61,000 positions, followed by trade, transportation and utilities with 25,000. The figures suggested the US labour market remained resilient but subdued, in line with the low-hire, low-fire backdrop described by Federal Reserve officials. ADP said gains were uneven across company sizes and sectors, with manufacturing adding only 2000 jobs despite tariff-driven reshoring efforts and professional and business services losing 8000.

Euro PMI falls into contraction

The euro-area private sector slipped back into contraction in April, with the S&P Global Composite PMI falling to 48.8 from 50.7 in March, its lowest level in 17 months, according to data released on Wednesday. The downturn was driven by services, where the business activity index dropped to 47.6 from 50.2, its weakest reading since February 2021, while manufacturing output continued to expand. New orders fell for a second straight month and business confidence sank to a 31-month low as the war in the Middle East weighed on demand, while input cost inflation accelerated to a 40-month high and selling price inflation climbed at the fastest pace in three years. European stock indices closed sharply higher on Wednesday. The Euro Stoxx 50 gained 2.5%, while Germany’s DAX rose 2.1% and France’s CAC 40 climbed 2.9%. Switzerland’s SMI also advanced 1.8% on Wednesday.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Airbnb, Enel, Rheinmetall, and Shell.

Economic data in focus: US weekly initial jobless claims (14:30).

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