Records Widen | Summit Opens Cold | Prediction Markets Go Mainstream | The Rally Still Runs Through AI

The S&P cleared 7,500. Two-thirds of the index had already cracked. Trump-Xi opened with Taiwan tension. Interactive Brokers(IBKR) added prediction markets. Hormuz stayed closed.

The S&P and Nasdaq were each up over 0.75% on the day. The Dow added over 350 points and eclipsed 50,000. The VIX held near 18.

Oil stayed near $102. The 10-year eased to 4.46% but remained near 2026 highs. Gold slipped below $4,700. The dollar firmed.

That is the surface.

Underneath, the rally is still narrow.

Wednesday’s record came with two-thirds of S&P components lower. Thursday’s close broadened, but the engine did not change. AI and semiconductors still carried the tape. The rest followed because the index forced them to.

Trump met Xi in Beijing. The tone was constructive. The substance was colder. Taiwan opened the meeting. Hormuz sat in the background. Trade headlines helped. They did not clear the inflation source.

The record is real.

The support is still concentrated.

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Xi warned Trump that mishandling Taiwan could push the relationship toward conflict. He called Taiwan the most important issue in bilateral relations. Trump avoided a direct public answer. That was the hard edge.

The soft edge came through trade.

Both sides agreed the Strait of Hormuz should remain open and free of tolls. Xi showed interest in buying more U.S. oil and agricultural products. Trump called the talks constructive. The summit began with trade, Iran, and Taiwan on the agenda, while CEOs including Elon Musk and Nvidia (NVDA) CEO Jensen Huang joined the trip. 

Prediction markets still price deliverables, not breakthroughs. Polymarket gives a U.S.-China Board of Trade around 66%. AI export restriction relief sits near 75%. China soybean purchases sit above 80%. Boeing (BA) aircraft purchases sit near 78%.

The Summit Gap

The summit can smooth trade. It cannot reopen Hormuz by statement. The market priced ceremony. The bottleneck still needs ships.

Semis recovered. The Nasdaq led. Nvidia(NVDA), Micron Technology (MU), Texas Instruments (TXN), and Marvell Technology (MRVL) helped the chip complex regain momentum. Applied Materials (AMAT) reports after the close and becomes the next capex test.

The rate backdrop still works against everything outside AI.

Kalshi prices zero Fed cuts in 2026 at 70%. One cut sits below 18%. Two cuts sit below 9%. The 10-year near 4.45% keeps pressure on utilities, real estate, and dividend names.

That is why breadth matters.

A record with broad participation signals confidence. A record powered by semis signals dependence.

The Narrow Record

The index owns the AI story. The average stock owns the rate story. Those are not the same trade.

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Interactive Brokers launched a unified prediction-market interface across Kalshi, CME Group, and ForecastEx. The platform lets clients compare prices across venues and trade event contracts alongside stocks, options, futures, crypto, and bonds. Initial markets focus on elections, climate, and economic indicators.

That matters today because markets are using these contracts to price everything the tape cannot settle cleanly.

Tariffs. Hormuz. Fed cuts. AI models. Disease risk.

The same day, a hantavirus market showed 7% odds of a 2026 pandemic with nearly $10 million in volume. Public health experts said the MV Hondius outbreak is not another Covid-style event. WHO confirmed 9 cases and 3 deaths, while exposed Americans are being monitored. The market is not pricing panic. It is pricing tail risk.

The New Risk Tape

Prediction markets are becoming the live dashboard for uncertainty. The risk is that the dashboard starts moving faster than the underlying facts.

AI and semis are still doing most of the work. Nvidia, Micron Technology, Texas Instruments, and Marvell Technology helped carry the Nasdaq higher.

The rest of the market has a harder setup.

The 10-year yield is still near 4.45%. Kalshi prices zero Fed cuts in 2026 at 70%. That keeps pressure on utilities, real estate, and other rate-sensitive stocks.

Hormuz is the main reason that pressure has not gone away. Polymarket puts Hormuz normalization by end of May at only 8%. Oil near $100 keeps inflation risk alive. Inflation keeps the Fed frozen. A frozen Fed keeps rates high.

That is why the Interactive Brokers (IBKR) story matters.

These markets are no longer just side bets. They are becoming tools investors use to price risks that normal markets struggle to capture quickly, like tariffs, oil shocks, Fed policy, weather, elections, and geopolitical outcomes.

The Trump-Xi summit can help around the edges. A tariff deal helps margins. AI export relief helps semis. Soybean or Boeing (BA) purchases help the headline.

But none of that fixes the main problem unless it helps reopen Hormuz.

The Simple Read

The market is at records because AI is strong. It is not at records because every risk is gone. Prediction markets are becoming the live scoreboard for those risks. The rally needs more stocks to join, or it needs AI to keep carrying the weight.

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The summit opened. Taiwan added tension. Trade offered optics. Hormuz stayed unresolved.

Interactive Brokers(IBKR) brought prediction markets deeper into brokerage infrastructure. That confirms how investors are pricing uncertainty now. Faster. Wider. Across more events.

What is priced: AI leadership, no Fed cuts, summit deliverables, and trade stabilization.

What is not priced: Hormuz closed through summer, inflation staying in the pipeline, or the average stock failing to catch the index.

The record arrived.

The breadth still has to prove it.

Capital moves early. Coverage catches up. The gap between the two is worth watching.