Can Tech Carry the S&P 500 to New Highs Despite a 6% Inflation Print?

NEW YORK — The S&P 500 touched a fresh all-time intraday high Wednesday, even as the most important inflation number of the week arrived well above forecast and two-thirds of the index’s components traded in the red.

At midday, the Nasdaq led all major averages with a gain of 1.11%, the S&P 500 added 0.52%, the Russell 2000 slipped 0.07%, and the Dow Jones Industrial Average shed roughly 154 points, or 0.31%, from Tuesday’s close of 49,760. The divergence between large-cap tech and everything else is the defining characteristic of this session — and it tells a more complicated story than the headline index levels suggest.

Data Visual

Midday Index Performance vs. Previous Close — May 13, 2026

Shows the split tape at midday: Nasdaq and S&P 500 in positive territory while the Dow and Russell 2000 lag, illustrating how narrow the day’s leadership really is.

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A Hot Inflation Print That the Market Decided to Ignore — Selectively

The morning’s dominant data point was April’s Producer Price Index, which jumped 1.4% month-over-month — the largest single-month increase since March 2022 and nearly three times the 0.5% consensus estimate. Year-over-year PPI climbed to 6.0%, a full percentage point above the 5.0% forecast. Energy prices, elevated by the ongoing Iran conflict, drove much of the acceleration.

The knee-jerk read would be: hot PPI means tighter policy expectations, higher yields, lower stocks. That’s not what happened. Instead, the market bifurcated sharply. Technology — particularly semiconductors — caught a separate bid driven by geopolitics, while rate-sensitive and consumer-facing names absorbed the inflation anxiety. As we’ve covered in detail, wholesale inflation has been building pressure on the Fed’s last line of defense for several months, and today’s print makes that pressure harder to dismiss.

The 10-year Treasury yield held at 4.47% — notably restrained given the data. That suggests bond traders either believe the Warsh Fed will lean hawkish enough to eventually contain the problem, or they see the Iran-driven energy component as transitory. Neither reading is obviously correct. WTI crude at $101.50 and gold futures at $4,689.20 are not telling a transitory story.

Data Visual

April PPI Monthly Change vs. Consensus Estimate — Context Since Jan 2026

Tracks month-over-month PPI prints against economist forecasts in 2026, highlighting how April’s 1.4% surge — nearly triple the 0.5% estimate — broke the trend.

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The Summit Trade: Nvidia’s China Bet Moves the Whole Semis Complex

While inflation data weighed on cyclicals, the real engine of Wednesday’s session was the Trump-Xi summit and the prospect of renewed advanced chip exports to China. Nvidia gained 2.5% at midday after CEO Jensen Huang joined the U.S. business delegation. The read is straightforward: if the summit produces any framework loosening export controls on advanced semiconductors, Nvidia’s addressable market expands materially and quickly.

Micron Technology gained more than 3%, and the VanEck Semiconductor ETF (SMH) advanced 2%, confirming the move was sector-wide rather than Nvidia-specific. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng wrapped up three hours of preliminary talks at Incheon International Airport ahead of the main summit, providing traders an early signal that dialogue was substantive rather than ceremonial.

The risk here is real, even if the market isn’t pricing it. Summit optimism has a short half-life. As explored in our earlier analysis of whether the U.S.-China trade truce is sufficient to sustain the rally, the gap between a summit photo opportunity and durable policy change is wide. Nvidia’s pop is pricing in an outcome that hasn’t been signed, ratified, or implemented.

Where the Session Is Breaking Down

Strip out semiconductors and the session looks considerably weaker. The State Street SPDR S&P Retail ETF (XRT) shed nearly 2% at midday and is now down 6.5% on the week — a move that reflects both inflation pass-through anxiety and consumer spending uncertainty. Advance Auto Parts and Revolve each slid more than 5%. Home Depot and JPMorgan, two reliable proxies for economic cycle health, were among the notable decliners alongside the Dow’s underperformance.

National Vision Holdings (EYE) provided the session’s sharpest single-stock warning. The optical retail chain tumbled 22% after reporting first-quarter revenue that missed estimates, despite adjusted EPS improving to $0.45 from $0.34 and comparable store sales growing 4.5%. The market’s reaction — the stock’s worst single-day drop since 2023 — tells you something about where the bar sits for consumer companies right now. Good enough is not good enough. The full-year guidance range of $2.03–$2.09 billion in net revenue apparently failed to reassure investors already skeptical of the consumer spending backdrop.

On the positive side, Wolfspeed surged 23% — a move significant enough to warrant its own analysis — while nCino climbed 7.7% and ManpowerGroup gained 7%. Loar Holdings dropped nearly 10% and Birkenstock fell 5.8%.

The Fed Chair Clock Runs Out Friday

Wednesday also marked a historic institutional shift. The Senate confirmed Kevin Warsh to the Fed Board of Governors 51-45, mostly along party lines with only Sen. John Fetterman crossing the aisle. A full vote on his chairmanship was expected Wednesday. Warsh, 56, previously served on the Fed Board from 2006 to 2011 and will take over from Jerome Powell, whose term officially ends Friday.

The timing is not incidental. Warsh inherits a Fed facing year-over-year PPI at 6.0%, crude oil above $100, and a labor market that has remained stable largely because hiring has slowed rather than because workers are being let go. That low-hire, low-fire equilibrium can unwind quickly if inflation forces a more aggressive policy response than the market currently expects. For context on what that policy inflection could mean, the question of whether hot inflation has permanently closed the rate-cut window is one traders should be actively pricing into duration exposure right now.

What to Watch Into the Close

The afternoon setup hinges on two variables: any headline from the Trump-Xi summit that confirms or walks back chip export optimism, and whether the 10-year yield breaks meaningfully above 4.47% on delayed PPI digestion. A yield move toward 4.55% or beyond would likely pressure the rate-sensitive names that have so far been merely lagging rather than collapsing. The S&P 500’s new all-time high is a real technical achievement — but a market where two-thirds of components are lower and the index is being carried by a handful of semis names is not a market signaling broad confidence. Watch whether breadth improves in the final hour or whether the close confirms the divergence.

This afternoon’s tape will test whether tech can hold its gains once summit headlines stop flowing and the market is left alone with a 6.0% PPI print, $101 oil, and a new Fed chair walking into his first week with zero margin for a dovish surprise. The all-time high on the S&P is real — but so is the fragility underneath it.