U.S. equity futures moved higher on Thursday as investors balanced renewed enthusiasm for artificial intelligence against geopolitical uncertainty surrounding the summit between Donald Trump and Xi Jinping.
At the same time, oil prices remained above $100 per barrel as markets looked for potential diplomatic progress on the Iran conflict. Meanwhile, shares of Cisco Systems (NASDAQ:CSCO) surged after the company unveiled a major AI-focused restructuring plan, while Kevin Warsh was officially confirmed as the next chair of the Federal Reserve.
Futures Advance as AI Optimism Continues
By 03:40 ET, Dow futures were up 176 points, or 0.4%, while S&P 500 futures gained 18 points, or 0.2%. Nasdaq 100 futures outperformed, rising 144 points, or 0.5%, supported by continued strength in technology stocks linked to artificial intelligence.
According to Reuters, the United States has approved around 10 Chinese companies to purchase Nvidia’s H200 AI chip, currently the company’s second-most-powerful processor, although shipments have not yet begun.
Jensen Huang, the CEO of Nvidia, is accompanying Trump during the China visit, fueling expectations that discussions could help unlock broader H200 sales into the Chinese market.
On Wednesday, the S&P 500 reached another record closing high, while the Nasdaq Composite climbed 1.2%. In contrast, the Dow Jones Industrial Average slipped 0.1%.
Analysts at Vital Knowledge observed that semiconductor stocks benefited from the Huang-China headlines, although software and services companies “were not invited to the latest tech bacchanalia.” They also noted that underlying market breadth “wasn’t nearly as robust,” pointing to weaker performance in the equal-weighted S&P 500 index.
Investors also largely brushed aside stronger-than-expected U.S. producer price data, marking the second consecutive day of upside inflation surprises.
“Equity bulls dismissed the PPI as simply a function of Iran and since the consensus view continues to anticipate an accord with Tehran, the assumption is that inflation will cool once that deal is reached,” the Vital Knowledge analysts said.
Trump and Xi Hold First Round of Talks
The opening round of discussions between Donald Trump and Xi Jinping concluded during the first stage of their two-day summit in Beijing.
Chinese state media reported that Xi said negotiations — particularly around trade — were progressing, although he cautioned that ongoing U.S. opposition concerning Taiwan could strain bilateral relations.
Markets are also monitoring whether the summit could produce any diplomatic initiatives connected to the Iran conflict. Some analysts believe Trump may seek Chinese support for a longer-term peace arrangement, given China’s role as one of the largest buyers of Iranian oil, although uncertainty remains over whether Beijing would accept such involvement.
The summit comes as the global economy faces mounting uncertainty tied to the prolonged closure of the Strait of Hormuz, the strategic shipping route off Iran’s southern coast through which roughly one-fifth of global oil supply passes.
Oil Prices Remain Elevated
Oil prices edged higher again on Thursday, with analysts at ING Group noting that traders are “eagerly awaiting the outcome of the meeting between [Trump and Xi], and whether it could yield some positive results on the Iran war.”
Brent crude remained above $105 per barrel, significantly higher than the approximately $70 level seen before the conflict escalated.
The sharp increase in energy prices has intensified concerns over renewed inflationary pressure worldwide, especially after recent U.S. inflation readings showed stronger-than-expected consumer and producer price growth.
Analysts at Morgan Stanley warned that the energy shock could weaken economic growth while also contributing to inflationary pressures beyond oil and gas markets.
Cisco Shares Jump After AI-Led Restructuring Announcement
Shares of Cisco Systems (NASDAQ:CSCO) rallied sharply in extended trading after the company announced a broad restructuring initiative focused on artificial intelligence.
Cisco said the overhaul would result in approximately $1 billion in charges tied to severance and related expenses. The company also confirmed plans to reduce its workforce by roughly 4,000 employees, representing around 5% of total staff.
The company expects approximately $450 million of these restructuring costs to be recorded during the fourth quarter of fiscal 2026, with the remainder expected during fiscal 2027. Cisco added that most of the charges would be cash-related.
Chief executive Chuck Robbins told analysts following the earnings release that the company does not “always have the exact resources that we need going forward in the right places,” adding that the restructuring is more about resource reallocation “versus savings.”
The restructuring comes as corporations continue increasing spending on AI processors and high-speed networking systems required to support advanced data centres.
Cisco also upgraded its fiscal 2026 revenue guidance, now forecasting revenue between $62.8 billion and $63 billion, compared with previous guidance of $61.2 billion to $61.7 billion.
Kevin Warsh Confirmed as Federal Reserve Chair
The U.S. Senate officially confirmed Kevin Warsh as the next chair of the Federal Reserve on Wednesday, placing the former banker and lawyer at the head of the central bank as policymakers continue confronting rising inflation pressures.
The Senate vote followed approval of Warsh’s appointment to the Fed’s seven-member Board of Governors earlier in the week.
Warsh will replace current Fed chair Jerome Powell when Powell’s term expires on Friday. Powell will remain a member of the Federal Reserve Board, while Fed Governor Stephen Miran is expected to leave his position to make room for Warsh.