There was a strong rally in stock markets across the world today led mainly by technology shares as investors continue to bet on artificial intelligence. The S&P 500 rose 1. 8%, while the Nasdaq Composite index of technology companies rose 2. 5% and both hitting new all-time highs. European markets also posted gains with the pan-European Stoxx 600 advancing by 1. 3%.

At the helm of the gains were semiconductor firms and big tech firms with Nvidia extending its incredible rally by adding another 4. 2% to get the market capitalisation of over $2 trillion. The company’s lead in the AI chips and its recent excellent financial performance have reinforced its role in the AI evolution. Other technology companies such as Microsoft, Alphabet and Meta also had huge increases of over 2%.

The enthusiasm around AI has been one of the key factors that supported the market sentiment in the past few months as investors are looking for the technology that will change the way industries operate and increase efficiency. But some experts are starting to express their concerns over the overvaluation in the tech sector, reminding the bubble of 1990s.

In Asia, markets were mixed, with Japan’s Nikkei 225 rising 0. 8% while China’s Shanghai Composite was down by 0. 5%. This divergence is due to the fact that there are still doubts regarding the pace of the Chinese economic growth even with the government’s stimulus packages.

Oil prices also increased with Brent crude increasing by 1. 2% to $84. 50 per barrel, with OPEC+ members sticking to their production reductions agreement. This is especially so given that the global oil demand is still rising especially in the emerging markets.

In currency trading, the US dollar was lower against a basket of major currencies with the euro and the British pound strengthening. The dollar fell as investors pared bets on the Federal Reserve’s rate cuts this year after the release of economic data that was better than expected.

The bond market also opened with higher yields with the 10-year U. S. Treasury yield increasing to 4. This is despite the number of infections rising to 3%, the highest it has been in the past few weeks. The decision is in line with the increasing optimism regarding the future of the economy and decreasing probability of future rate cuts.

In business news, Tesla said it wants to increase the production at its Shanghai facility by two-fold in an effort to increase its manufacturing capacity in China. This is in line with the significance of the Chinese market for electric vehicle producers and Tesla’s efforts to stay ahead in the market.

At the same time, Amazon announced a new project to implement generative AI into its e-commerce services to optimize the product suggestions for the customers. The announcement made Amazon’s stock rise by 3. 5%, and stressed that the role of AI in the retail industry is on the rise.

In Europe, Volkswagen and the workers’ union signed a preliminary deal to reduce the expenses and enhance productivity of the German plants of the automobile giant. The measures that are part of the deal such as early retirement packages and cutting down working hours are expected to assist Volkswagen in competing better with manufacturers of electric vehicles and managing the changes in the automotive market.

As markets wound down, investors prepared for the upcoming data points such as the US jobless claims and the PCE price index which is the Federal Reserve’s preferred measure of inflation. These reports might help to understand the state of the U. S. economy and may affect the further monetary policy.