AI Capex Boosts Global Stocks as US-Iran Reports Roil Markets

Global stocks rose to fresh record highs on Wednesday as large cloud providers accelerated capital spending on artificial intelligence and markets reacted to conflicting reports about a US‑Iran understanding. Traders said AI infrastructure spending and the Middle East headlines drove sharp moves across equities, energy, bonds and currencies.

On Wall Street, the Dow Jones Industrial Average and the Russell 2000 reached new highs while the S&P 500 and Nasdaq finished close to flat. Consumer discretionary led sector gains, up about 1.9% for the day, and United Airlines climbed roughly 6%. Semiconductor and software names were mixed: Qualcomm fell about 6% and Nvidia eased about 1% as investors trimmed positions after recent gains.

Analysts and market participants cited projections that hyperscale cloud operators could spend up to $1 trillion on AI infrastructure by 2027. That anticipated capital expenditure supported demand for chips, cloud services and enterprise software tied to AI projects.

Conflicting accounts about progress toward a US‑Iran agreement moved commodity and fixed‑income markets. Iranian state media reported an unofficial memorandum of understanding to reopen the Strait of Hormuz within a month; the White House rejected that account as “a complete fabrication.” Oil prices fell about 4%, slipping below $100 a barrel as traders reassessed the chances of a lasting deal. U.S. Treasury yields eased by a few basis points and a heavily marketed five‑year note auction drew acceptable demand ahead of key inflation data.

Inflation and central bank guidance influenced market pricing. Economists expect April headline personal consumption expenditures inflation to rise to about 3.8% year‑over‑year and core PCE to accelerate to about 3.3% y/y. Fed funds futures traders have removed odds of 2026 rate cuts and put roughly a 60% probability on an active Fed rate increase by year‑end. In Europe, short‑term swap markets show growing odds of a 25‑basis‑point European Central Bank hike in June; ECB officials signaled they could continue tightening regardless of developments in the Middle East.

Investors shifted allocations in fixed‑income markets as heavy Treasury issuance and persistent inflation weighed on demand for U.S. sovereign paper. Fund managers increased exposure to high‑grade corporate bonds, viewing top‑tier corporate balance sheets as more attractive amid fiscal pressures and the prospect of higher yields.

Regional performance diverged. South Korea’s KOSPI rose about 3% to a record high, supported by large year‑to‑date gains in memory chip leaders: Samsung Electronics is up roughly 158% YTD and SK Hynix about 258% YTD. The Japanese yen weakened to around 159.50 per dollar, a level that raises intervention talk, and reports indicate the Bank of Japan is considering a June rate increase. SoftBank is collaborating with major Japanese manufacturers on an AI industrial data initiative. India’s equities underperformed as foreign investors trimmed holdings and the rupee weakened.

Currency and commodity moves reflected intraday swings. The New Zealand dollar gained about 1% after the Reserve Bank of New Zealand left policy unchanged in a split decision that suggested possible near‑term hikes. Spot gold dipped toward a two‑month low near $4,456 an ounce amid higher global yields, while the U.S. Dollar Index was broadly unchanged.

In technology markets, SpaceX is scheduled to list on Nasdaq on June 12 with a targeted valuation between $1.75 trillion and $2 trillion. Private AI developers including OpenAI and Anthropic continue to seek large funding rounds and public market options to support growth.

Technical indicators showed the Nikkei 225 had breached the upper boundary of a rising channel and flagged overbought momentum. Market technicians pointed to near‑term support around 65,665 and cited 64,620 as a downside trigger level, with an all‑time high near 66,190 as a reference point.

Traders will focus on the April PCE inflation report and weekly U.S. jobless claims for signals on inflation and policy. Any additional definitive news on a US‑Iran settlement is likely to prompt further repricing across energy, bond and currency markets.