The S&P 500 and Nasdaq rallied to new record highs on Wednesday, May 13, with the S&P 500 gaining 0.6% and the Nasdaq surging 1.2%. According to reports from CNBC TV18, the S&P 500 reached a record high of 7,444, while the Nasdaq hit 26,402. Despite this broad market advance, nearly two-thirds of S&P 500 constituents ended with losses in mid-week trading, confirming poor market breadth and indicating the rally has been led by a handful of stocks. As noted by Swissquote's Ipek Ozkardeskaya, the index finally gave in to rising yields before quickly recovering as dip buyers stepped in around the 7,340 level, with the rebound doing little to dispel broader concerns about market stability. Recent market data shows S&P 500 futures were little changed as of 1:09 p.m. Tokyo time, while US equity-index futures advanced with contracts for the Nasdaq 100 Index climbing 0.2%.
Market participants are looking forward to a positive outcome of the summit between US President Donald Trump and Chinese President Xi Jinping, scheduled to take place in Beijing. As reported by CNBC TV18, both leaders are expected to discuss rare earths, AI, Iran, Taiwan and Tariffs. Additionally, there may be announcements of a large Chinese order of US planes or purchase of Soybean from US farmers. Ahead of the trip, President Trump wrote on Truth Social that he expects "great things" to come out of the summit. According to Bloomberg, Trump highlighted the business delegation joining his trip that includes Nvidia Corp.'s Jensen Huang and Tesla Inc.'s Elon Musk, with Huang saying the meetings in Beijing "went excellent." Trump said China and the US will have a "fantastic future" and Xi stressed partnership over rivalry in their meeting, setting a positive tone for the first visit by a sitting US president to Beijing in nearly a decade. As noted by Wedbush Securities analyst Dan Ives, the summit represents a defining inflection point for the AI revolution, with Nvidia's presence at the center of high-stakes geopolitical negotiations.
Despite the market rally, investors completely ignored hotter-than-expected wholesale inflation data for April. According to CNBC TV18, the Producer Price Index rose 6% year over year, well above expectations of 4.9%, while increasing 1.4% month over month versus a 0.5% forecast. On an annualized basis, April PPI rose 6%, marking the biggest increase since December 2022. US wholesale inflation accelerated in April to the fastest pace since 2022 on a war-driven increase in energy prices that's feeding into higher freight transportation costs, as reported by Bloomberg. Core PPI, which strips out food and energy, climbed 5.2% annually compared with estimates of 4.3%, and advanced 1% on a monthly basis versus a 0.3% consensus. The data suggests stronger-than-anticipated pipeline inflation, which could feed through to consumer prices in the coming months and complicate the outlook for monetary policy. Markets largely brushed aside these concerns as attention shifted toward geopolitical developments, with optimism for tech and stocks masked worries about inflation that have driven bets the Federal Reserve will raise interest rates next year.
Semiconductor stocks were once again at the center of the rally, with chipmakers including NVIDIA Corporation and Micron Technology surging 2.3% and 4.8% respectively as investors continued to pile into artificial intelligence-related trades. According to CNBC TV18, the Nasdaq led the gains, climbing 1.2% to 26,474, while the S&P 500 rose 0.6% to close at 7,444. Apple also closed at a new record high of almost $299 per share, helping offset concerns sparked by stronger-than-expected producer price inflation data. The tech-powered Nasdaq Composite started higher but has gone just below flat, with Marvell Technology leading the Nasdaq 100 risers at 8%, followed by peers Texas Instruments, Micron Technology and Analog Devices. A gauge of Asian technology shares climbed as much as 2.3% to a record, with Bloomberg noting that artificial intelligence trade remained in focus with the surge. Cisco Systems Inc. shares jumped 20% in extended trading after a stronger-than-expected sales outlook, while Cerebras Systems Inc. raised $5.55 billion in its US initial public offering as the artificial intelligence chipmaker seizes on the surging demand for semiconductors. Wedbush expects the summit to prove "constructive," with analysts framing an improving geopolitical backdrop, Nvidia's upcoming earnings, and accelerating enterprise AI adoption as a strongly positive setup for chips, cloud infrastructure, and AI software.
While technology stocks drove the market higher, the majority of stocks outside the technology industry fell, as pressure builds on Wall Street. According to Associated Press, American Electric Power fell 3% after announcing a $2.6 billion offering of its stock, while Birkenstock Holding dropped 12.9% after the British company said its results for the latest quarter were hurt by U.S. tariffs and other factors. The Dow Jones Industrial Average dipped 67 points, or 0.1%, while the yield on the 10-year Treasury edged up to 4.47% from 4.46% late Tuesday and is well above its 3.97% level from before the war. The rise in yields helped send stocks of utilities and real-estate owners to some of the sharper losses in the S&P 500, as such companies tend to pay relatively big dividends, which become less attractive to investors looking for income when bonds are paying more in interest. MSCI's Asia Pacific equities index was 0.1% lower after rising as much as 0.8% in early trading, with Shares in mainland China fell 1.3%, having touched their highest level since 2021 ahead of the talks. China's CSI 300 Index dropped 1.3% and the main gauge in Shanghai declined 1%, as noted by Bloomberg.
