A look at the day ahead in European and global markets

By Ankur Banerjee, Asia Finance & Markets Breaking News Correspondent

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The record-setting AI-led rally appears to be chugging along just fine as investors shrug off the prospect of interest rates staying higher to combat inflation, oil prices above $100 a barrel and ‌an impasse in negotiations to end the Iran war.

Adding to the mix, a high-stakes summit between U.S. President Donald Trump and China's Xi Jinping has so far yielded few details, leaving markets on edge. Still, with expectations low, even a continuation of the status quo could elicit a positive response.

U.S. President Donald Trump walks with Chinese President Xi Jinping upon arrival at the Great Hall of the People in Beijing, China, May 14, 2026. REUTERS/Evan Vucci

Trump described Xi as a great leader and a friend as they kicked off ⁠two days of talks on Thursday that are set to cover their fragile trade truce, the Iran war and U.S. arms sales to Taiwan.

The pomp-filled summit began at Beijing's imposing Great Hall of the People, where Xi greeted Trump on the red carpet, with the leaders shaking hands and smiling warmly. Trump has brought along a group of CEOs, including Elon Musk and Nvidia CEO Jensen Huang, looking to resolve issues with China.

Graphics are produced by Reuters

But for now the AI theme remains in charge and Asia in the lead. South Korea's KOSPI and Taiwan stocks are just shy of their record peaks ‌touched ⁠earlier this week, while Japan's Nikkei hit another all-time high.

All three indexes have been turbocharged by AI-driven bets, with little sign of momentum fading as Asian chipmakers bring in record profits from their hyperscaler customers.

SK Hynix, easily the best performing major stock since 2025, is on the cusp of joining the trillion dollar club. ⁠The stock is up more than 1,000% since the start of 2025.

Investor focus will also be on a slate of UK economic data that will reveal the extent of the damage from the Iran war that ⁠erupted at the end of February as the political drama heats up, keeping pressure on sterling and government bonds.

British Prime Minister Keir Starmer has so far resisted calls to resign after one ⁠of Labour party's worst defeats in last week's local and regional elections.