Record Highs for Nasdaq and S&P 500 Despite Inflation Surge
U.S. stock markets defied expectations on Wednesday, with the Nasdaq Composite and S&P 500 closing at record highs. This occurred despite hotter-than-expected inflation data that pushed Treasury yields to their highest levels since July 2025. The Nasdaq surged 1.20% to close at 26,402.34, while the S&P 500 gained 0.58% to finish at 7,444.25. However, the Dow Jones Industrial Average fell 0.14% as communication and financial stocks declined.
The rally came even as the Producer Price Index showed wholesale prices skyrocketed in April. The monthly PPI rose 1.4% and core PPI surged 1%, far above analyst expectations of 0.4% and 0.3% respectively. Year-over-year, the wholesale price index jumped 6%, largely driven by higher energy costs from the ongoing Iran War. The hot inflation data sent the 10-year Treasury yield to 4.473%, while the 20-year and 30-year yields eclipsed 5%.
The semiconductor sector continued its remarkable run, with the PHLX Semiconductor Index up 64% since the end of March. This surge was driven by optimism for AI data center buildouts. Silver futures rose nearly 3% to $88.14 per ounce, while gold edged up to $4,689.20. The strong tech performance came as chip stocks rallied on news that Nvidia CEO Jensen Huang would join President Trump on a visit to China.
Source: The Street