Record high for stocks as Trump meets Xi, pound braces for UK leadership fight

By Marc Jones

LONDON, May 14 (Reuters) - AI fervour kept satellite stocks astatine grounds highs connected Thursday arsenic investors looked past rising borrowing costs, a high-stakes acme betwixt U.S. President Donald Trump and China's Xi Jinping, and a unrecorded governmental situation successful Britain.

The pan-European STOXX 600 roseate 0.5% and, with Wall ‌Street futures pointing 0.3% higher, MSCI's planetary stocks scale extended its rebound from Iran warfare lows to 15%. [.EU]

Much of the absorption was connected Beijing wherever Xi told ‌Trump that commercialized talks were making progress. There was a informing astir Taiwan too, but traders were banking connected tariff and AI deals to support the rally running.

Europe's different large communicative was Britain's governmental crisis, wherever Prime ​Minister Keir Starmer faced a imaginable enactment situation aft dense losses successful determination elections past week.

Health curate Wes Streeting - seen arsenic a imaginable successor - said helium was resigning and had "lost confidence" successful Starmer's leadership, urging him to measurement aside.

The uncertainty kept the UK's 10-year borrowing outgo supra 5%, having deed its highest since the 2008 fiscal situation this week arsenic markets braced for a apt bruising enactment battle.

Sterling, down astir 1% since Monday, was a fraction little astatine $1.3505, though information showing Britain's system unexpectedly grew successful March offered immoderate support.

"We indispensable presume determination is going to ‌be a enactment challenge," Franklin Templeton's Global Investment Strategist Michael Browne ⁠said.

That would provender into a statement implicit however overmuch country a caller UK person would person to prosecute much assertive economical policies fixed the strains connected nationalist finances, helium added.

"On the aboveground it doesn't look similar determination is much."

DOLLAR GETS A LIFT FROM INFLATION DATA

Wall Street futures ⁠pointed to further grounds highs later, with astir $6 trillion chipmaker Nvidia seen rising astir 2% aft Reuters reported the U.S. has cleared astir 10 Chinese firms to bargain its second-most almighty AI chip, the H200.

The dollar held caller gains arsenic investors stake the Federal Reserve's adjacent determination would beryllium a complaint hike aft a tally of hotter-than-anticipated ostentation data.

U.S. shaper prices connected Wednesday posted their biggest emergence ​since ​early 2022, a time aft information showed yearly user ostentation accelerating astatine its fastest gait successful 3 ​years.

With the system and labour marketplace inactive strong, traders are starting to ‌price successful a imaginable Fed hike successful the archetypal fractional of 2027, though astir economists inactive spot a chopped arsenic the much apt adjacent move.