New Record Highs for Markets — But All Eyes Are on Trump’s China Visit and What Beijing Really Thinks

New Record Highs for Markets — But All Eyes Are on Trump’s China Visit and What Beijing Really Thinks

News Article | May 12, 2026

Markets continued their upward momentum yesterday, with both the Nasdaq and S&P 500 reaching fresh record highs once again.

Investor sentiment remained positive following last week’s stronger-than-expected jobs report, helping stocks push higher despite renewed geopolitical tensions after Iran rejected the latest U.S. peace proposal.

Although U.S. officials described Iran’s response and counteroffer as “completely unacceptable,” optimism still lingers that negotiations could eventually lead to an agreement.

For now, the fragile ceasefire remains intact, despite ongoing exchanges of fire between both sides. Meanwhile, the U.S. naval blockade in the Strait of Hormuz continues to stay in place.

President Trump is reportedly weighing the possibility of renewed military action as Iran has yet to formally accept a peace framework.

Adding further pressure, the U.S. announced new sanctions Monday targeting companies involved in facilitating Iranian oil exports to China.

These developments come ahead of President Trump’s scheduled meeting with Chinese President Xi Jinping in Beijing this week (May 13–15).

What makes this visit especially intriguing is the growing speculation around how China truly views President Trump behind closed doors. While official statements remain diplomatic, many in China reportedly see Trump as both unpredictable and potentially transformative for global trade, technology, and geopolitical power dynamics.

The two leaders are expected to discuss several major topics, including the reopening of the Strait of Hormuz, trade relations, technology, and artificial intelligence.

On the economic front, Existing Home Sales rose slightly to an annualized pace of 4.02 million units, compared to last month’s revised 4.01 million reading, marking a 0.3% monthly increase. Year-over-year growth remained unchanged.

Investors are now turning their attention to today’s NFIB Small Business Optimism Index and the closely watched Consumer Price Index (CPI) inflation report.

Headline CPI is forecast to rise 0.6% month-over-month, easing from last month’s 0.9% increase, while the annual inflation rate is expected to move higher to 3.8% from 3.3%. Core CPI, which excludes food and energy, is projected to increase 0.3% monthly and 2.7% annually.

Last week’s Personal Consumption Expenditures (PCE) report — the Federal Reserve’s preferred inflation gauge — came in largely as expected, though it showed a modest uptick.

Markets will also receive another inflation update tomorrow with the Producer Price Index (PPI) report.

Today’s CPI data is scheduled for release at 8:30 AM ET and will likely play a major role in shaping market sentiment.

Earnings season also remains active, with roughly 300 companies reporting today alone. Over the remainder of the week, nearly 930 companies are expected to release results, including Cisco on Wednesday and Applied Materials on Thursday.

The pace of earnings reports will begin to slow next week, though investors are still eagerly awaiting results from AI leader NVIDIA and Analog Devices on Wednesday, May 20.

So far, earnings season has reinforced the strength and resilience of the economy while highlighting the continued surge in demand for artificial intelligence technologies. AI-related growth has been a major driver behind strong sales, earnings beats, and improving corporate guidance.

Markets could still face volatility tied to ongoing Middle East peace negotiations and developments from the Trump-Xi meeting in China.

However, if investors continue focusing on economic data and corporate earnings, markets may be poised for another strong week ahead.