(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

May 14 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

U.S. President Donald Trump's two-hour meeting with China's Xi

Jinping in Beijing on Thursday was full of warm words and seemed

to skirt many contentious issues - though Xi said trade talks

were making progress and issued a warning over Taiwan.

For now, the first day of the summit has offered little for

investors to grasp on to. That leaves the market with two

dominant themes - oil-fuelled inflation and the AI boom.

I'll get into that and more below.

But first, check out my latest column on why the Fed may have to

hike rates.

And listen to the latest episode of the Morning Bid daily

podcast. Subscribe to hear Reuters journalists discuss the

biggest news in markets and finance seven days a week.

'G2' CHOREOGRAPHY

On the inflation front, U.S. producer prices in April rankled

with their biggest monthly rise in four years, adding to news of

above-forecast core consumer price gains in the same month.

Fed models now anticipate that headline annual inflation

will be back above 4% in May, and bond markets are restive, with

yields rising across the curve as futures move to price a

possible Fed rate rise over the next 12 months.

Boston Fed boss Susan Collins said the central bank could no

longer look through supply shocks as inflation had remained

above target for five years now - and was rising again.

With no end in sight to the U.S.-Iran stalemate, a tough

backdrop faces incoming Fed Chair Kevin Warsh, who will take the

helm tomorrow after his appointment was confirmed by the Senate

on Wednesday.

But rising borrowing rates have done little to dent stock market

enthusiasm as Wall Street indexes pushed higher on Wednesday,

taking the S&P 500 and Nasdaq to record closing highs. Stock

futures pointed higher before the bell, while European shares

rose after the open.

In Asia, Japan's Nikkei hit another record and South Korea's SK

Hynix was on the cusp of becoming the country's second

trillion-dollar market cap after Samsung cleared that milestone

last month. Asia's chip giants were in focus again as Taiwan's

TSMC upped its standing forecast for chip demand through 2030 by

50% to $1.5 trillion.

Meantime, Britain's political uncertainty eased a touch as Prime

Minister Keir Starmer continued to resist calls to stand down.

However, a leadership challenge may still be brewing, with

health minister Wes Streeting reportedly preparing to resign and

mount a bid to oust Starmer.

Chart of the day

The Philadelphia SE semiconductor index has soared 64% in

just six weeks, compared to a nearly 17% gain for the S&P 500.

Shares of Micron Technology and Advanced Micro Devices more than

doubled during that time, while Intel nearly tripled. Analysts

estimate that gains in semis and memory stocks accounted for 70%

of the $5.1 trillion in market capitalization added by the S&P

500 in 2026.

Today's events to watch

* U.S. April import prices (8:30 a.m. EDT), weekly jobless

claims (8:30 a.m. EDT), retail sales (8:30 a.m. EDT)

* Kansas Fed's Jeffrey Schmid, Cleveland Fed's Beth Hammack

and New York Fed's John Williams all speak

* Trump-Xi summit continues

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Opinions expressed are those of the author. They do not reflect

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committed to integrity, independence, and freedom from bias.