In the closing session on Wednesday, U.S. stocks showed mixed performance, with semiconductor stocks broadly advancing. The Nasdaq and S&P 500 indices reached new all-time highs. The U.S. Producer Price Index (PPI) for April surged 6% year-over-year, marking the largest increase since 2022, indicating rising inflationary pressures. Following the PPI report, U.S. Treasury yields climbed to a 10-month high.
The Dow Jones Industrial Average fell by 76.48 points, or 0.15%, to close at 49,684.08. The Nasdaq Composite gained 340.73 points, or 1.31%, finishing at 26,428.93. The S&P 500 rose 50.13 points, or 0.68%, to settle at 7,451.09.
Technology stocks outperformed other market sectors, while inflation concerns stemming from rising energy prices due to the Iran conflict pressured other sectors like retail and banking. NVIDIA's stock price rose over 1%. Advanced Micro Devices (AMD) gained 1%, and Micron Technology increased by more than 5%. The VanEck Semiconductor ETF advanced 1%.
It was reported that NVIDIA's CEO, Jensen Huang, accompanied U.S. President Trump on his visit to China.
Adam Crisafulli of Vital Knowledge noted: "His last-minute addition to Trump's China trip has reignited investor interest in tech stocks, following Tuesday's decline which left the market hoping for a breakthrough with the H200 chip. That the CEO of the world's largest company accompanies his country's president on a key geopolitical visit should surprise no one and is hardly a reason to buy back into chip stocks, but the sector's recent behavior has not been rational."
Against a backdrop of renewed enthusiasm for artificial intelligence (AI) trades, semiconductor stocks have surged recently, leading the broader market back to record levels.
Of course, the S&P 500 and Nasdaq retreated from their highs on Tuesday after U.S. consumer inflation data exceeded expectations.
On Wednesday, investors received another inflation metric: the April Producer Price Index. In April 2026, U.S. wholesale prices recorded their highest year-over-year increase in over three years, signaling a more severe inflation outlook as upstream cost pressures in the supply chain intensify.
Data released by the U.S. Bureau of Labor Statistics on Wednesday showed the seasonally adjusted Producer Price Index (PPI) rose 1.4% month-over-month. This significantly surpassed the 0.5% increase expected by economists surveyed by Dow Jones and was higher than the revised 0.7% monthly gain in March, marking the largest monthly increase since March 2022.
Year-over-year, PPI increased by 6%, the highest rate since December 2022. Excluding food and energy, the core PPI rose 1% month-over-month, exceeding the expected 0.4%. Excluding food, energy, and trade services, PPI increased 0.6% month-over-month.
Energy prices were the primary driver behind the larger-than-expected surge in producer prices, also serving as a core catalyst for the spike in the consumer price index reported by the Bureau of Labor Statistics on Tuesday.
BLS data indicated that approximately three-quarters of the increase in goods prices within the PPI came from a 7.8% surge in final demand energy prices. Over 40% of that increase stemmed from a 15.6% jump in gasoline prices—a month when the U.S.-Israel conflict with Iran disrupted global energy markets, pushing U.S. retail gasoline prices above $4 per gallon.
Although this round of inflation is widely attributed to the U.S.-Israel conflict with Iran and tariffs imposed by the Trump administration a year ago, the PPI data shows that price pressures have become more widespread.
The services price index accelerated, rising 1.2% month-over-month, the largest monthly gain since March 2022. Two-thirds of that increase came from a 2.7% rise in trade services prices, suggesting tariff costs may be starting to have a greater impact on final prices. A 3.5% surge in wholesale margins for machinery and equipment also contributed to pushing the services price index higher.
Christopher Rupkey, Chief Economist at FWDBONDS, stated: "Fed officials can only sigh when they see today's report because, regardless of who is Fed Chair, now is not the time for the central bank to consider interest rates, no matter how much Trump 2.0's economic officials might wish otherwise. Producers are seeing more inflation, which means consumers will see more inflation soon; it's only a matter of time. That much is certain."
Despite Tuesday's pullback in tech stocks, AI trading remains a primary driver of the market this year. Olaolu Aganga, Head of Portfolio Construction at Citi Wealth, believes AI spending is expanding beyond the technology sector, creating room for investors to buy into other market opportunities.
She said: "We look at this from a global landscape perspective, viewing these trends as enduring and long-term, such as energy security and infrastructure—companies that can benefit from capital expenditures related to energy, the grid, and energy independence. So, if you missed this wave, frankly, there are other themes we believe will play out over time. We need to watch these themes, and we believe these areas also offer sustainable profitability."
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