Wall Street shook off another hot inflation print on Wednesday as megacap technology stocks powered the S&P 500 and Nasdaq Composite to new record closing highs. A 3% surge in chipmakers and broad strength in AI-linked names more than offset weakness in rate-sensitive sectors, with seven of the eleven S&P 500 sectors finishing in the red. The rally was led by the same handful of mega-cap names whose CEOs are currently in Beijing with President Trump’s business delegation to China.
What Moved Markets
The S&P 500 closed at 7,444.25, up 43.29 points or 0.58%, notching a fresh all-time high despite the inflation headwinds. The Nasdaq Composite surged 1.2% to close at 26,402.34, also a record, as semiconductor and AI stocks bounced back sharply from Tuesday’s sell-off. The Dow Jones Industrial Average was the laggard, slipping 67.36 points or 0.14% to 49,693.20, weighed down by losses in utilities, healthcare, and consumer staples names.
The April Producer Price Index came in hotter than expected, with wholesale prices rising 6% year-over-year — the biggest annual increase since early 2022. Energy costs, driven by the ongoing disruption in the Strait of Hormuz, were the primary culprit. The 10-year Treasury yield climbed about 2 basis points to 4.473%, its highest level since July 2025, reflecting growing bets that the Federal Reserve will keep rates elevated well into the second half of the year. Despite the bearish macro backdrop, investors piled into growth and tech names, betting that AI-driven earnings power can outrun inflation.
Notable Movers
Nebius Group (NBIS) was the day’s standout performer, surging roughly 17% to an all-time high of $206.05 after the AI infrastructure company crushed first-quarter expectations. Revenue soared nearly eightfold to $399 million from $50.9 million a year earlier, underscoring the explosive demand for AI cloud computing capacity.
Alphabet (GOOGL) and Tesla (TSLA) climbed 2.6% and 3.6%, respectively, buoyed by optimism around President Trump’s China summit and the broader AI trade. The Philadelphia Semiconductor Index rose 2.3%, recovering a chunk of Tuesday’s 5% plunge, with names like Nvidia (NVDA) and Broadcom (AVGO) leading the rebound.
On the downside, Alibaba Group (BABA) fell about 3% after missing fourth-quarter revenue estimates. The Chinese e-commerce giant has been investing heavily in technology and quick commerce, which has weighed on near-term profitability. Intuit (INTU) dropped 4.4% on analyst downgrades ahead of its upcoming earnings report. The utilities sector led decliners, falling 1.7% as rising yields pressured dividend-paying stocks.
Looking Ahead
The market’s ability to push to new highs in the face of 6% producer price inflation and 4.47% Treasury yields is a testament to how powerful the AI spending cycle has become — but the divergence between tech haves and everything else is widening. Seven of eleven S&P sectors closed lower on Wednesday, and the Dow’s decline shows that the rally remains narrow. Cisco (CSCO) reports earnings after the bell on Wednesday, which could set the tone for enterprise tech spending. Investors will also be watching for developments out of President Trump’s meetings in Beijing, where trade, AI cooperation, and the Iran conflict are all on the table. With the Fed firmly on hold and inflation running hot, any disappointment on the geopolitical front could quickly test the market’s resolve.