Markets Soar on AI Themes, Ignore Oil Price Surge

Global markets are trading near record highs, with investors focused on AI themes following strong earnings. The MSCI All-World index is up for a third straight week and is just below its all-time high.

The benign inflation data released in the US has dented expectations for a rate hike next month. As a result, oil prices have surged due to faltering talks to end the Iran war, but investors remain unfazed. The VIX volatility index, often seen as the market's 'fear index,' is set for its fourth weekly decline.

The Bank of Japan could raise interest rates as soon as September, according to three sources familiar with policymakers' thinking. This has led to a strengthening yen and a drop in the dollar. In commodities, gold has touched two-month highs due to expectations of lower inflation and rising rates.