TL;DR

Nvidia surged to a fresh all-time high Thursday morning as Reuters reported the US has approved H200 AI chip sales to roughly 10 Chinese technology firms -- including Alibaba, Tencent, ByteDance, and JD.com. The disclosure came as President Trump met with Chinese President Xi Jinping in Beijing, accompanied by Nvidia CEO Jensen Huang and Elon Musk. S&P 500 and Nasdaq futures extended their record-breaking streak into Thursday, with AI and semiconductor stocks leading the charge.

What Happened: H200 Clearance, Beijing Summit, and Nvidia at All-Time Highs

Early Thursday, Reuters reported exclusively that the US Commerce Department has cleared approximately 10 Chinese companies to purchase Nvidia's H200 GPU -- the company's second-most powerful AI accelerator. The firms approved include major Chinese technology groups Alibaba, Tencent, ByteDance, and JD.com, though no actual deliveries have been made yet.

The disclosure landed on the same morning that President Trump began formal meetings with Xi Jinping in Beijing, with Jensen Huang among a delegation of top US executives who made the trip. Trump had invited Huang last-minute to join Air Force One, according to the New York Times, framing the visit as a push to "open up" China to US business. Elon Musk was also part of the delegation. Meetings are scheduled for both Thursday and Friday.

Nvidia stock closed at an all-time high of $225.83 on Wednesday, briefly pushing its market capitalization toward $5.5 trillion. As of Thursday premarket, shares were up another 1.85%, suggesting the stock could push closer to or beyond the 52-week high of $227.84 at the open. Nvidia's next earnings report is set for May 20.

Broader index futures extended gains Thursday morning. The S&P 500 (which closed at a record 7,444.25 on Tuesday before adding another record close Wednesday) and Nasdaq futures both opened to new highs, continuing a streak driven by AI momentum and a historic earnings season. First-quarter profits for S&P 500 companies have grown 27% year over year -- far above the 12% analysts initially projected -- with roughly 83% of reporting companies beating estimates, according to Bloomberg and Reuters.

Why Markets Moved

Three forces converged at once to push markets higher:

  • The H200 clearance removes a key uncertainty that has weighed on Nvidia's China growth story. Chinese tech firms have been hungry for high-end AI compute but blocked from receiving it. The authorization signals that the US may be willing to allow limited sales of premium chips -- just below the most restricted H100 level -- as a diplomatic lever during the summit.
  • The Trump-Xi summit carries significant weight for any company with China exposure. Markets are treating Jensen Huang's presence as a signal that AI chip trade could be part of a broader US-China economic normalization push, even if details remain uncertain.
  • Momentum and earnings: The broader AI trade has been self-reinforcing. With S&P 500 earnings growth running nearly three times above expectations, and Nvidia's May 20 report weeks away, institutional and retail sentiment has shifted sharply bullish. Retail sentiment on the S&P 500 ETF (SPY) flipped to "extremely bullish" Thursday morning, according to Stocktwits data.

Notably, markets largely absorbed a hotter-than-expected Consumer Price Index print published earlier this week -- which showed energy-driven inflation rising sharply, partly due to the ongoing US-Iran war and Strait of Hormuz disruptions -- without pulling back meaningfully. The AI narrative is currently overriding macro headwinds.

Implications for Trader Cohorts

Equity and index traders: The S&P 500 and Nasdaq are in confirmed uptrends driven by a narrow cohort of large-cap AI and semiconductor names. Breadth remains somewhat thin -- the Dow lagged both Tuesday and Wednesday -- which means any reversal in the tech sector could be amplified. Traders holding index longs are sitting on record gains but should track whether the summit produces concrete trade language or just diplomatic photos.

Semiconductor and AI stock traders: Nvidia is the focal point, but it is not trading alone. Taiwan Semiconductor (TSM), Micron, and Cisco have all gained alongside NVDA in recent sessions. The H200 clearance specifically benefits Nvidia, but broader AI infrastructure spending is likely to lift adjacent names. Watch for analyst upgrades following Thursday's news.

Futures traders (ES, NQ): Futures extended to record levels overnight and into the morning session. Momentum is clearly up, but the risk is that a summit failure or lack of concrete announcements on Friday could trigger a sharp intraday reversal. Volatility is compressed heading into the Nvidia earnings event on May 20.

Crypto traders: The Senate's CLARITY Act vote -- which ChartDojo covered earlier this week -- remains a separate catalyst for digital assets. Bitcoin and Ethereum have not been the primary movers today; AI stocks are taking the spotlight. Crypto may re-enter focus if CLARITY passes or if broader risk sentiment shifts.

Potential Positives vs Negatives

Positives:

  • H200 deliveries beginning could add a significant new revenue stream for Nvidia, which has been locked out of the Chinese high-end AI market since 2023 export controls.
  • A successful Trump-Xi summit could unlock broader trade normalization, benefiting not just Nvidia but US tech names with China supply-chain exposure.
  • Nvidia's May 20 earnings are already positioned for a strong beat given its record datacenter demand globally. Any positive China language from Jensen Huang would likely amplify the reaction.
  • AI-driven earnings strength is broad and accelerating; a 27% earnings growth rate across the S&P 500 is a historically supportive environment for equities.

Negatives:

  • Zero H200 deliveries have been made so far despite the clearances. Logistical, political, or additional bureaucratic friction could delay or cancel actual shipments.
  • A summit that produces no firm trade language -- or worse, breaks down over the Iran war, Taiwan, or other flashpoints -- would remove the diplomatic premium currently priced into markets.
  • Tech-heavy indices are increasingly concentrated. If Nvidia misses or guides cautiously on May 20, the resulting volatility could pull the S&P 500 and Nasdaq sharply lower.
  • Inflation is not resolved. The latest CPI data was above expectations, and the ongoing Hormuz disruption (Brent at $105.87 as of Thursday) continues to push energy costs higher. A Fed policy response could threaten the rate-cut timeline that equity bulls have been counting on.

What Could Happen From Here

Base scenario (most likely): The Trump-Xi summit produces cautious optimism -- a joint statement on trade cooperation with no binding chip deal, but positive language on resuming commercial dialogue. Nvidia stock consolidates near all-time highs. H200 deliveries begin in coming weeks. The S&P 500 and Nasdaq hold near record levels heading into Nvidia's May 20 earnings. This scenario is confirmed if summit communiques include explicit mention of technology trade or chip supply. It is invalidated if the summit ends early or without a joint statement.

Upside scenario: The summit produces a formal technology trade framework that explicitly clears a path for H200 deliveries and potentially allows more AI chip exports to China. Nvidia stock surges on the news, potentially adding another 5-10% before earnings. Semiconductor and AI names broadly extend gains. The S&P 500 pushes toward 7,600-7,700. This scenario is confirmed by a US-China joint communique naming AI chip trade, or a Commerce Department announcement expanding the approved-buyer list. It is invalidated by continued diplomatic deadlock or a new tech export restriction announcement.

Downside scenario: The summit collapses over a secondary issue -- Taiwan, Iran, or trade deficit disputes -- producing no joint statement and heightened rhetoric. Nvidia gives back recent gains sharply as China hopes evaporate. The S&P 500 and Nasdaq, trading at stretched valuations with thin breadth, could correct 3-5% quickly. Energy and safe-haven assets would likely spike. This scenario is confirmed by hostile post-summit press statements or a walkout by either side. It is invalidated by even a minimal joint communique on economic cooperation.

What to Watch Next (Next 24h)

  • Summit communiques Thursday evening / Friday: Any formal US-China statement is the single most important near-term catalyst. Watch for language on AI chips, technology trade, or export control revisions.
  • Nvidia stock price at the open: If the stock gaps above its 52-week high of $227.84 and holds, momentum traders will likely add. A reversal from that level would be the first sign of short-term exhaustion.
  • Commerce Department announcements: A formal statement on H200 delivery authorization or an expanded approved-buyer list would be highly bullish for NVDA and semiconductors broadly.
  • S&P 500 breadth: Watch whether the rally broadens beyond mega-cap AI names (Nvidia, Micron, Cisco, TSM) into the rest of the market. Narrow breadth in a record-breaking environment is a classic late-stage warning sign.
  • Nvidia May 20 earnings: Guidance on China revenue, H200 shipment volumes, and AI datacenter demand will be the next major catalyst after the summit concludes.

Sources

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