Stock market today: Dow slides, S&P 500 and Nasdaq rise as PPI inflation data comes in hot

The “Magnificent Seven” trade is roaring today, with the Roundhill Magnificent Seven ETF (MAGS) up about 2% and tracking its best day in four weeks as it hits a fresh intraday record.

The move is broad at the top.

Alphabet (GOOGL) is tracking its best day since April and has also hit its 17th intraday record of the year. Nvidia (NVDA) is up for a sixth straight session and hit an intraday all-time high. Apple (AAPL) crossed $300 for the first time, also hitting a record high.

Tesla (TSLA) is at a four-month high, Meta (META) is tracking its best day in two weeks, and Amazon (AMZN) is also higher.

The six winners have added roughly $516 billion in market value today, versus a $26 billion loss from Microsoft (MSFT), which is down for a fourth straight session.

That puts the net Magnificent Seven market-cap gain since the March 30 general market lows at $5.5 trillion — with Nvidia and Alphabet each kicking in a solid trillion-and-a-half.

Apple’s (AAPL) shares rose more than 1% Wednesday, approaching $300 and heading toward a record close.

The iPhone maker is on pace for a second record close in a row as CEO Tim Cook traveled to China with President Trump’s delegation for a summit with Chinese leader Xi Jinping. The delegation landed in Beijing on Wednesday.

Cook’s trip, along with Nvidia’s (NVDA) Jensen Huang, Tesla’s (TSLA) Elon Musk, and other top executives like Larry Fink of BlackRock (BLK) and Kelly Ortberg of Boeing (BA), underscores the ongoing push to stabilize US-China commerce relations amid an AI race and a complex geopolitical backdrop.

Apple shares have been playing catch-up with the rest of the “Magnificent Seven” group in recent weeks. The hardware maker has been slow to invest the same amount in AI as hyperscalers. Instead, Apple has focused on “Apple Intelligence” through partnerships such as with OpenAI and Google Gemini, rather than building everything from scratch.

Apple stock is up more than 10% year to date.

The French artificial intelligence lab Mistral AI is working with European banks to develop and deploy a cybersecurity-focused AI model like Anthropic’s Mythos, per Bloomberg.

Anthropic’s announcement of the cybersecurity and hacking capabilities of Mythos — and the US lab’s subsequent decision to limit access to just a handful of major US companies — sparked a panic around the consequences of AI powerful enough to find exploits in highly critical software, such as in the financial services industry.

Mistral has been developing a similar cybersecurity-focused model and is now in discussions with major European banks about access once the model is ready for use, Bloomberg reported.

While Anthropic has limited access to a small circle of primarily major US companies, the EU is in talks with the company about using the Mythos model to test European banks and other major firms for security violations.

“We must have control over this technology,” said Mistral CEO Arthur Mensch at a National Assembly hearing in France on Tuesday.

“You can’t have the French military’s source code scanned by Mythos. That creates such an irreparable dependency that we absolutely must find solutions.”

Energy prices have captured investor attention as the war in Iran has sent oil (BZ=F, CL=F) surging, but strength in other commodities has been “equally notable this year,” Adam Turnquist, chief technical strategist at LPL Financial, wrote in a client note published Wednesday.

The Bloomberg Commodities ex-Energy index, which measures the performance of a basket of commodities outside of the energy sector, notched an all-time high on Wednesday. The index has spent April and May breaking through the previous 2011 high on the back of a China-fueled supercycle.

Not only has energy rallied this year, but metals have also surged, led most prominently by silver (SI=F) and copper (HG=F), where demand from a combination of tight supply, export restrictions, and the build-out of AI and electric vehicles have sent futures up 67% and 30%, respectively, on the two metals over the past six months.

At the same time, the closure of the Strait of Hormuz during the war in Iran has choked off major global supplies of fertilizers, putting upward pressure on a basket of agricultural commodities already up on a past year of global extreme weather events.

The run-up could have wide-ranging consequences for a US economy already facing sticky inflation, further confirmed this week by hotter-than-expected CPI and PPI reports, Turnquist said.

“If sustained, rising prices across industrial metals, precious metals, and agricultural commodities (not just oil) could create broader inflationary pressures by lifting input costs across manufacturing, construction, transportation, and food production,” Turnquist said.

“That dynamic could make it more difficult for inflation to moderate in the months ahead, even if energy prices eventually stabilize.”

Treasury yields were at their highest levels of the year after hotter-than-expected wholesale inflation data was released on Wednesday and consumer price data on Tuesday showed inflation accelerated in April.

The 10-year Treasury yield (^TNX) edged up toward the 4.5% level — sitting at 4.47%. It is currently at its highest level since July of last year.

The longer-dated 30-year yield (^TYX) remained above 5% key psychological level on Wednesday, while the 5-year yield (^FVX) held at 4.13%. Bond yields move inversely to prices.

All three bond yields have moved up between 2%-4% over the past five days as markets began to price in higher inflation expectations.

The 4.5% level on the 10-year yield and 5% level on the 30-year yield are seen as critical levels that can begin to exert downward pressure on equities. On Tuesday, Veteran market strategist Ed Yardeni told Bloomberg TV he’s not “freaked out” by the move higher.

“I kind of view bond yields of 4 and a quarter percent to 4 and three-quarter percent as normal — I’m not getting freaked out by it,” Yardeni said. “The US bond is still viewed as the safe haven, and there’s plenty of reasons to worry about things these days.”

Traders keep buying the dip in semiconductors.

At the lows on Tuesday, Nvidia (NVDA) and Micron (MU) were both down $100 billion, and Micron was tracking its worst day in over a year.

Nevertheless, Nvidia closed at a record high on Tuesday and hit an intraday record shortly after the open today, along with several other chip stocks.

Here are this morning’s intraday record highs:

Dow Jones Sectors/Industries: Electronic Equipment, Computer Hardware, Electronic & Electrical, Industrial Metals

Tech stocks: Apple (AAPL), Analog Devices (ADI), AXT (AXTI), Cisco (CSCO), Lattice Semiconductor (LSCC), MACOM (MTSI), Nvidia (NVDA), ON Semiconductor (ON), SMART Global (PENG), Qnity Electronics (Q), Semtech (SMTC), STMicroelectronics (STM), Tower Semiconductor (TSEM), Texas Instruments (TXN), Vishay Intertechnology (VSH), Wolfspeed (WOLF)

Industrial stocks: Rocket Lab (RKLB)

Real estate stocks: Ventas (VTR)

The US stock market traded on a wobbly footing on Wednesday after hotter-than-expected price inflation figures dampened hopes for rate cuts, with updates from President Trump’s trip to Beijing on deck.

The Dow Jones Industrial Average (^DJI) fell 0.5%, while the S&P 500 (^GSPC) ticked down just below the flat line. The Nasdaq Composite (^IXIC) gained 0.2%.

US producer prices rose far more than expected in April, according to data released Wednesday by the Bureau of Labor Statistics. Prices rose 1.4% in April over the previous month, far above March’s revised gain of 0.7% and economists’ expectations for an increase of 0.5% on the month.

On a year-over-year basis, headline prices rose by 6% in April, above estimates of 4.8% and above the previous month’s 4.3% year-over-year increase.

In focus on Wednesday is any news out of President Trump’s trip to China alongside a group of CEOs that includes Elon Musk, Apple’s Tim Cook, and the last-minute addition of Nvidia leader Jensen Huang.

Wholesale inflation came in higher than expected in April, data released Wednesday by the Bureau of Labor Statistics showed.

Producer prices rose 1.4% in April over the previous month, far above the 0.5% increased expected by economists. It also outstripped March’s revised gain of 0.7%.

The “core” reading — which excludes the more volatile food and energy costs — showed producer prices advanced by 1% over the previous month. That was more than double the 0.3% growth economists had predicted and steeply above March’s revised gain of 0.2%.

On a year-over-year basis, headline prices rose by 6% in April, above estimates of 4.8% and outstripping March’s 4.3% print. Core inflation came in at 5.2%, hotter than estimates of 4.3% and previous month’s 4% revised gain.

Morgan Stanley raised its year-end target for the S&P 500 to 8,000 from 7,800, citing an unexpectedly strong earnings season that has powered the benchmark to record highs.

Growth to 8,000 would represent a roughly 8% upside over the index’s 7,400 close on Tuesday. Growth to the bank’s updated 12-month outlook target of 8,300 would represent 12% growth for the index.

“Our bullish index view is an ⁠earnings story, not a multiple expansion one,” Morgan Stanley analysts led by Mike Wilson said. “Over the next 12 months, we see the rolling recovery continuing to progress, driven by a strong ‌earnings ⁠environment as positive operating leverage persists and is further enhanced by AI adoption.”

First quarter profits for companies in the S&P 500 have grown 27% throughout the season, far above the 12% analysts had expected, according to Bloomberg. Roughly 83% of the 440 S&P 500 companies that reported earnings up to May 8 have beaten analyst estimates, Reuters noted.

The heightened outlook from one of Wall Street’s major banks comes even as geopolitical turmoil has wrangled the global market, with the war in Iran, US-China relations, the AI build-out, and complications for the Federal Reserve all in focus.

Resiliency throughout that chaos — “despite geopolitical risk, private credit concerns and AI disruption” — is “supportive of our view,” the bank’s analysts wrote.

Alibaba (BABA) stock fell 3% in premarket on Wednesday before paring losses to less than 1% following its quarterly earnings report. The Chinese tech giant has been increasing spending on AI and user experience efforts.

Yahoo Finance’s Ines Ferre explains what’s behind the move:

The Chinese e-commerce and cloud giant reported a 3% increase in fourth quarter revenue on Wednesday, missing analyst expectations.

Alibaba’s earnings were weighed down by heavier spending on AI initiatives, cloud infrastructure expansion, and continued investment in its rapid-delivery business, which focuses on fulfilling orders within an hour.

Cloud revenue surged an annualized 38% to $6.13 billion, roughly in line with Wall Street estimates.

Earlier this year, the company split its artificial intelligence operations from its cloud computing division and appointed CEO Eddie Wu to head the newly established “Alibaba Token Hub” unit as it pushes to turn its AI investments into a profitable business.

Read more here.

Silver is perking up, copper just hit a record, and gold is sitting out the move, notes Yahoo Finance’s Jared Blikre in today’s Chart of the Day.

He writes:

Silver futures (SI=F) and copper futures (HG=F) have been rallying hand-in-hand lately, while gold futures (GC=F) have drifted lower.

The metals market is drawing a line between safe-haven demand and hard-infrastructure demand — and right now the AI build-out is showing up on the copper-and-silver side.

… Data centers don’t run on chips alone. They need power, wiring, cooling systems, backup equipment, grid upgrades, and physical construction. Copper is the obvious beneficiary. Silver’s role is less obvious to general investors, but it has heavy industrial uses too, especially in electronics, electrical equipment, and solar.

Read more here.

Nvidia CEO Jensen Huang was a last-minute addition to Trump’s delegation to China. Huang was not on the initial list of CEOs coming, but he joined the flight at a refueling stop for Air Force One at Anchorage International Airport on Tuesday night.

Tesla (TSLA) CEO Elon Musk was already on board, according to a White House official.

Yahoo Finance’s Ben Werschkul reports that Huang’s initial lack of attendance was attributed to worries among the White House’s more hawkish national security leaders regarding his willingness to push Trump toward opening up the Chinese market.

But reports suggest Trump apparently overrode those concerns, calling Huang himself to extend the invitation.

Other CEOs visiting China include Tim Cook of Apple (AAPL), Larry Fink of BlackRock (BLK), Kelly Ortberg of Boeing, Brian Sikes of Cargill, and Jane Fraser of Citi (C).

Read more here.

Bloomberg reports:

The worsening shortage in global memory chips due to the artificial intelligence buildout is driving a widening gulf in corporate results and stock performances.

Shares of memory makers Micron Technology Inc. (MU) and Samsung Electronics Co. (005930.KS, SSNLF) have surged to record highs on blockbuster results driven by buoyant product prices. Meanwhile, consumer products makers from HP Inc. (HPQ) to Nintendo Co. (NTDOY, 7974.T) have been weighed down by profit pressures stemming from higher chip costs.

The squeeze shows how AI is reshaping the chip cycle, turning memory from a commodity input into a critical bottleneck. That has made pricing power the dividing line in global equities: suppliers are posting windfall gains, while device makers face higher costs and weaker margins.

The crisis has been apparent in recent results. Memory pricing was mentioned more than 550 times in company earnings calls and quarterly reports so far this year — already more than any full year in data compiled by Bloomberg tracking global equities since 1999.

“It’s becoming increasingly obvious that the memory crunch is not only worse than feared but also becoming more prolonged than had been expected,” said Michael Brown, a senior research strategist at Pepperstone Group Ltd. in London. “With AI demand continuing to surge, what we now hear from those close to the issue is that we might see the crunch continuing in some manner potentially as far as 2030.”

Read more here.

Bloomberg reports:

Oil steadied after rising almost 8% over the past three sessions as a resolution to the Middle East conflict remains elusive, with Iranian exports showing further strain from a US Naval blockade of the Strait of Hormuz.

Brent (BZ=F) crude traded near $107 a barrel, while West Texas Intermediate (CL=F) futures were below $102. There were no ocean-going tankers observed at Iran’s Kharg Island over the past several days, satellite images show, the first sign of an extended halt at the nation’s main export hub since hostilities began.

The Iran war is unlikely to feature heavily in talks between President Donald Trump and his Chinese counterpart Xi Jinping in Beijing this week, the US leader told reporters at the White House on Tuesday, saying trade discussions would be prioritized. He added that, “we have Iran very much under control.”

Read more here.