Wall Street shook off the hottest wholesale inflation reading in more than three years on Wednesday, pushing both the S&P 500 and Nasdaq Composite to fresh all-time highs as the technology trade — supercharged by a geopolitical catalyst that no one saw coming — overwhelmed the macro headwinds. The session’s defining moment was not the Producer Price Index miss. It was the image of Nvidia CEO Jensen Huang boarding Air Force One to Beijing alongside President Trump for a summit with Chinese President Xi Jinping — a signal that the AI chip trade may be about to get a very large new market opened to it.
US Markets: Records Despite Inflation — But Only for a Third of the Market
The Headline Numbers
The S&P 500 gained 0.58% to close at a new all-time high of 7,444.25, while the Nasdaq Composite surged 1.2% to 26,402.34 — also a new record. Both indices achieved fresh intraday highs before the close. The Dow Jones Industrial Average was the odd one out, slipping 67.36 points (-0.14%) to 49,693.20 as its cyclical composition — heavy in financials, industrials, and consumer companies — made it more vulnerable to the day’s inflation shock.
The headline gains obscure a deeply bifurcated market. Roughly two-thirds of S&P 500 components finished lower on the day, according to FactSet data. The rally was almost entirely driven by a handful of technology names — most notably semiconductor stocks, Apple, and AI infrastructure plays. Home improvement retailer Home Depot, banking giant JPMorgan, Nike, and Accenture all fell, with Nike and Accenture touching multi-year lows. The XRT Retail ETF fell nearly 2% and was on pace for its biggest weekly loss since October. National Vision (EYE) tumbled 22%, its worst session since 2023, after a revenue miss.
Scorching PPI — Ignored by Tech, Punished Everywhere Else
April’s Producer Price Index jumped 1.4% month-over-month — the largest monthly increase since March 2022 and far above the 0.5% Dow Jones consensus estimate. On an annual basis, wholesale inflation reached 6.0%, the highest since December 2022 and above the 4.9% estimate. This followed Tuesday’s CPI print of 3.8% YoY, meaning the US now has back-to-back upside inflation surprises in the same week. Pipeline pressures are intensifying: producers are absorbing rising energy costs from sustained above-$100 oil, and those costs are working their way forward.
The immediate market response was telling. Stock futures tumbled on the data release Wednesday morning. But the losses were short-lived. Within an hour of the open, technology stocks — particularly semiconductors — had fully recovered and pressed higher.
Ross Mayfield, Baird investment strategist, explained the dynamic on CNBC: “The chip trade has certainly kind of taken on a life of its own where I think investors think that the kind of demand and the growth there is so structural that these other more cyclical macro forces don’t really change the dynamic. Amid all the stuff going on in the world, in particular the oil shock, I think investors have felt safe hiding out in those stocks because the AI boom is coming regardless.”
Wolfe Research’s chief investment strategist Chris Senyek was more cautious. He noted that while semiconductors bounced Wednesday, the market is “increasingly feeling toppy” in the near term: “The short-term bull case from here rests on oil prices falling rapidly from the end of the Iran conflict and/or Nvidia’s EPS print on 5/20 materially surprising to the upside.”
Jensen Huang Flies to Beijing — The Market’s Real Catalyst
The session’s turning point came before the US market even opened. Nvidia confirmed that CEO Jensen Huang joined President Trump on his trip to Beijing to meet Chinese President Xi Jinping. The optics were unmistakable: the world’s most valuable chipmaker’s leader was in the room as the US and China discussed their trade and economic relationship. Investors read it as a signal that progress on Nvidia’s ability to sell AI chips in Chinese markets — a market currently limited by US export controls — could be on the table.
Nvidia (NVDA) closed up more than 2%. The effect rippled across the semiconductor sector: Micron (MU) +4%, On Semiconductor (ON) +10%, Marvell Technology (MRVL) +7%, and the VanEck Semiconductor ETF (SMH) +2%. This was the sector’s second consecutive sharp reversal — after falling Tuesday on CPI, the group bounced hard on the China diplomatic signal.
Creative Planning CEO Peter Mallouk argued on CNBC that the rally in chipmakers still has room to run. “This growth is because of expected earnings. It’s not really a speculative bubble,” he said. “It seems like we’ve got so much demand ahead of the supply trying to meet it that it’s got a lot of room to run.”
Apple Crosses $300 for the First Time
Apple (AAPL) shares touched $300.49 intraday on Wednesday — crossing the $300 threshold for the first time in the company’s history. The stock closed at $298.87, up 1.38%, confirming a new all-time closing record for the second consecutive session. Apple’s product cycle is considered largely independent of domestic macro headwinds, and its growing services revenue provides further insulation. Among the 27 S&P 500 stocks that hit 52-week highs on Wednesday, Apple, Cisco, eBay, Analog Devices, Hewlett Packard Enterprise, and Datadog were standouts, with several at all-time highs.
Kevin Warsh Confirmed as Fed Chair — A Hawkish Pivot
A consequential Senate vote took place on Wednesday: Kevin Warsh was confirmed as the next Chair of the Federal Reserve, replacing Jerome Powell. Warsh, who served on the Fed Board from 2006 to 2011 during the global financial crisis, is widely viewed as more hawkish in his policy orientation than his predecessor. His confirmation, alongside the twin inflation shocks of this week’s CPI and PPI data, puts a significant question mark over the timeline for Federal Reserve rate cuts that many market participants had been anticipating for later this year.
Earlier Wednesday, Boston Fed President Susan Collins reinforced the holding pattern. Collins said it would be important to “maintain the current slightly restrictive monetary policy stance for some time,” and added that a prolonged Iran war could require outright tightening: “I could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2 percent in a timely manner.”
US Sector Snapshot — May 13, 2026
| Sector | Change |
|---|---|
| Communication Services | +2.65% ✦ Leader |
| Information Technology | +0.98% |
| Consumer Discretionary | +0.75% |
| Real Estate | −0.90% |
| Financials | −1.07% |
| Utilities | −1.26% ✦ Worst |
Utilities are down nearly 5% in May alone, pressured by rising Treasury yields — the US 10-year note closed at 4.467% — which make the sector’s dividend yields less competitive and raise capital costs for its infrastructure-heavy business model.
US Market Snapshot — May 13, 2026
| Indicator | Close / Value | Change |
|---|---|---|
| S&P 500 | 7,444.25 | +43.29 (+0.58%) ★ ATH |
| Nasdaq Composite | 26,402.34 | +314.14 (+1.2%) ★ ATH |
| Dow Jones | 49,693.20 | −67.36 (−0.14%) |
| VIX (Fear Gauge) | 17.87 | −0.67% |
| April PPI (MoM) | +1.4% | Highest since March 2022 |
| April PPI (YoY) | +6.0% | Highest since December 2022 |
| US 10-Year Yield | 4.467% | −0.012 |
| WTI Crude Oil | ~$100.91/bbl | Easing from $102.18 |
After-Hours: Cisco’s Blowout Quarter Caps the Day
After the close, Cisco Systems (CSCO) surged 17% in extended trading after posting blowout fiscal Q3 results and issuing guidance that significantly exceeded Wall Street expectations. For the current quarter (Q4), Cisco guided for adjusted EPS of $1.16–$1.18 per share on revenue of $16.7–$16.9 billion — against analyst estimates of $1.07 EPS and $15.82 billion in revenue. Cisco also announced it would cut approximately 4,000 jobs as it restructures around AI-driven enterprise networking and software. The results were a strong signal that enterprise AI infrastructure spending — the layer below the flashy semiconductor plays — is accelerating rapidly.
StubHub (STUB) popped 13% after Q1 revenue of $446 million (vs $432M est) and EBITDA of $72.1 million (vs $65.1M est). Doximity (DOCS) fell 19% after full-year revenue guidance and current-quarter EPS both missed consensus. Cerebras Systems priced its highly anticipated IPO above the expected range at $185 per share, underscoring continued investor appetite for AI infrastructure plays heading into Thursday.
European Markets: Rebound with UK Gilt Drama Continuing
Continental Europe Recovers Strongly
European markets closed broadly higher on Wednesday, recovering most of Tuesday’s losses. The pan-European STOXX 600 gained 0.79% to 611.42, while the DAX in Frankfurt advanced 0.76% to 24,136.81, FTSE MIB in Milan rose 1.0% to 49,480.70, and the CAC 40 in Paris added 0.35% to 8,007.97. Several factors supported the recovery: a modest pullback in oil prices (WTI eased from $102.18 to ~$100.91), optimism around the Trump-Xi summit for global trade, and a technical rebound from oversold levels after Tuesday’s heavy selling.
UK: Gilt Yields Remain Volatile, FTSE Outperforms
The FTSE 100 gained 0.58% to 10,325.35, outperforming the CAC despite continued political turmoil in London. UK gilt yields remained volatile as pressure on Prime Minister Keir Starmer intensified, with the 10-year gilt yield hovering near 5.073% — slightly below Tuesday’s 5.126% spike. Sterling’s weakness relative to the dollar provided a natural hedge for the FTSE 100, whose multinational components benefit from a weaker pound translating overseas earnings upward.
The UK fiscal situation remains fragile: a political leadership vacuum, sticky above-5% gilt yields, and an economy absorbing both the Iran war oil shock and domestic political instability simultaneously. European bank stocks stabilized on Wednesday after Tuesday’s sharp selloff in UK banks (NatWest -4.7%, Lloyds -4.3%, Barclays -4.1%).
European Market Snapshot — May 13, 2026
| Index | Close | Change |
|---|---|---|
| STOXX Europe 600 | 611.42 | +4.79 (+0.79%) |
| FTSE 100 (London) | 10,325.35 | +60.03 (+0.58%) |
| DAX (Frankfurt) | 24,136.81 | +181.88 (+0.76%) |
| CAC 40 (Paris) | 8,007.97 | +28.05 (+0.35%) |
| FTSE MIB (Milan) | 49,480.70 | +489.72 (+1.0%) |
| UK 10-Year Gilt | 5.073% | Volatile (Tues: 5.126%) |
What to Watch on May 14 (Thursday)
- US April Retail Sales: The consumer spending data arrives Thursday and could confirm whether the inflation numbers are translating into actual spending cuts — or whether American consumers are still holding up. Track the release in real time on the EconPlex Economic Calendar.
- Initial Jobless Claims (week ended May 9): Any pickup in claims would add a new dimension to the macro picture — inflation plus softening labor markets.
- April Import/Export Price Index: A third consecutive inflation data point this week. Export prices rising would be a meaningful input into the stagflation debate.
- Cisco (+17% AH) at the open: The stock is priced for a large gap-up Thursday, which could add significant tailwind to the Nasdaq. Cisco’s guidance implies $1.16–$1.18 EPS on $16.7–$16.9B in revenue next quarter — well above consensus. This is a bellwether for enterprise AI networking demand.
- Trump-Xi summit outcomes: Trump arrived in Beijing with a delegation of CEOs. Any announcement on tariff relaxation, AI chip export controls, or trade framework will move markets sharply on Thursday. Watch specifically for any language about Nvidia’s ability to sell H-series chips in China.
- Earnings pre-bell: Honda, Yeti, Viking Holdings, Klarna, and AI chip IPO Cerebras Systems (priced at $185/share) begin trading Thursday.
- NY Fed’s Williams speaks: John Williams will moderate a discussion Thursday afternoon, which could offer the first read on how the Fed leadership transition views the week’s inflation data.
The session’s verdict: The AI trade is not just alive — it is actively overriding the macro narrative. Two consecutive hot inflation prints, above-$100 oil, and a yield curve pointing toward higher-for-longer rates all failed to dent the semiconductor and AI infrastructure narrative. The catalyst was specific: Jensen Huang in Beijing signals that the AI trade may have a new, enormous market potentially opening up. Whether that proves durable depends on what emerges from the Trump-Xi summit — and whether the week’s inflation data starts to bite in Thursday’s retail sales figures. The Warsh confirmation adds a new layer: monetary policy hawks are now in charge, and the market hasn’t fully priced that shift yet.
Stay ahead of Thursday’s macro events and the Cisco gap-up’s implications with live market indicators, sector data, and the Economic Calendar on EconPlex.
Sources: CNBC Markets Live (May 13), CNBC — April PPI report, CNBC — Kevin Warsh confirmed as Fed Chair, CNBC — Jensen Huang joins Trump China trip, CNBC — Cisco Q3 earnings, CNBC — European markets May 13, CNBC — Alibaba earnings, CNBC — Cerebras IPO, CNBC — Trump arrives in Beijing, US Bureau of Labor Statistics — April PPI release