S&P 500 Hits New Record, Tech Rally Ignores PPI Data
The S&P 500 hit a new record high on Wednesday (May 13), as market interest in technology stocks once again dominated the index's direction despite the latest US inflation data coming in hotter than expected. The S&P 500 rose 0.58% to 7,444.25, while the Nasdaq Composite Index gained 1.2% to 26,402.34—both also setting intraday and closing records. The Dow Jones Industrial Average fell 0.14% (-67.36 points) to 49,693.20.
The gains were primarily led by the technology and chip sectors. Nvidia rose more than 2%, Micron gained more than 4%, and the VanEck Semiconductor ETF (SMH) gained 2%. At the same time, market breadth weakened: about two-thirds of stocks in the S&P 500 were in the red, including Home Depot and cyclical stocks like JPMorgan, amid inflation concerns related to rising energy prices stemming from the Iran war, which are weighing on the retail and banking sectors.
Data-wise, producer inflation pressures strengthened again. April's PPI jumped 1.4% (MoM)—the largest monthly increase since March 2022 and well above the 0.5% forecast. Annually, wholesale inflation rose 6%, the highest since December 2022 and exceeding the consensus of 4.9%. The combination of stubbornly declining inflation and high energy costs sharpened the narrative of tighter interest rates for longer, which typically poses a challenge for riskier assets outside the technology sector.
Tech sentiment was also supported by geopolitical-economic dynamics, after Nvidia CEO Jensen Huang joined President Donald Trump's visit to China to meet with President Xi Jinping. The market picked up on signals of possible developments regarding access to Nvidia's AI chip sales in the Chinese market, although expectations for the meeting remained limited.
Going forward, the market will monitor whether the chip rally and AI theme remain strong enough to offset pressures from inflation and energy. Key variables that will determine the next direction include the outcome of the Trump-Xi meeting, energy price dynamics related to the Iran war, and whether further inflation data reinforces concerns about prolonged high interest rates. (arl)*
Source: Newsmaker.id
