By Martin Baccardax
Tech is back on the menu Wednesday, following a brief downturn stoked by worries linked to faster inflation and the U.S. war with Iran, and set to power markets higher again as investors look for cover ahead of President Donald Trump hotly anticipated summit in China this week.
Nvidia traded higher and stretched its lead as the world's most-valuable company after CEO Jensen Huang unexpectedly was added to the list of U.S. executives joining Trump's entourage on Air Force One. The group will arrive in Beijing later Wednesday ahead of a 36-hour visit culminating with talks with President Xi Jinping.
"I will be asking President Xi, a Leader of extraordinary distinction, to 'open up' China so that these brilliant people can work their magic, and help bring the People's Republic to an even higher level!," Trump said in a Truth Social post late Tuesday. "In fact, I promise, that when we are together, which will be in a matter of hours, I will make that my very first request."
That outreach, and the inclusion of the Nvidia leader alongside tech bosses Tim Cook of Apple and Elon Musk of SpaceX and Tesla, suggested tech sector access will be a main source of discussion in the meetings, alongside issues such as trade, Taiwan, and the war in Iran.
Stocks in the sector powered firmly higher Wednesday, led by an early 2.5% advance for Nvidia and gains across the broader tech complex, with the Nasdaq Composite poised for another all-time high and the S&P 500 likely to follow.
Tech has been the market's outstanding performer of late, with both the Information Technology sector posting a staggering 24.7% gain over the past month, nearly five times higher than any other sector in the S&P 500.
Limp gains in financials, materials, and energy, alongside outright declines in healthcare and utilities, tell the broader market story: Without tech, the all-time highs, the solid GDP numbers, and the improvements in investor sentiment simply don't happen.
The president's ambitions for this China trip, however, have to be set against what's proving to be a setback from the signature foreign policy operation of his second term.
The U.S. war with Iran continues, albeit with a long, uneasy truce in the Gulf region, and oil prices continue to climb.
That's stoking domestic inflation, which reached the highest levels in nearly three years last month, taking domestic gasoline prices north of $4.50 a gallon, the highest since 2022, and generating enough economic uncertainty to test the new Federal Reserve chairman's mettle on interest rates. Kevin Warsh is expected to be confirmed as central bank chief on Wednesday.
It may also be testing the president's patience.
"I don't think about Americans' financial situations," he told reporters on Tuesday when asked about motivations on talks with Iran. "I don't think about anybody. I think about one thing: We cannot let Iran have a nuclear weapon."
Paul Donovan, UBS chief economist, suggested that while the April inflation data might be perplexing, the president's reaction was notable.
"Since Trump took office, coffee prices have risen 24%, beef over 19%, gasoline over 19%, and vegetables 10.5%," he said. "These are price increases that consumers notice and remember."
Forgetting certainly won't be easy.
Oil remains well north of $100 a barrel early Thursday, with futures prices suggesting levels of at least or more than $90 a barrel all the way into November.
The inflation data also has added another leg higher to U.S. Treasury bond yields, with 10-year notes trading at 4.461% following a limp auction of $42 billion in new paper that drew the weakest bids since last August and the worst foreign demand in more than a year.
Tech likely will paper over those cracks for the time being. But the meteoric rise of both the Magnificent 7 giants, and the chip producers benefiting from their artificial-intelligence largesse, has started to feel fragile.
Write to Martin Baccardax at martin.baccardax@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 13, 2026 06:35 ET (10:35 GMT)
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