[New York Stock Exchange] S&P 500 Hits Record High Despite April PPI Shock

Expansion of Tech Stock Investor Sentiment
Nvidia CEO Joins Delegation
Rising Expectations for AI Investment

On May 13 (local time), the three major U.S. stock indices closed mixed as the U.S. Producer Price Index (PPI) for April significantly exceeded expectations, reigniting concerns over inflation. However, as investor sentiment toward artificial intelligence (AI) remained strong, the S&P 500 index hit a record high.

On this day, at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (Dow Jones) closed at 49,693.20, down 67.36 points (0.14%) from the previous trading day. The S&P 500 index, which is centered on large-cap stocks, rose by 43.29 points (0.58%) to close at 7,444.25, while the technology-heavy Nasdaq index gained 314.14 points (1.20%) to finish at 26,402.344.

View of the New York Stock Exchange. New York, USA – Photo by Yoonju Hwang

The U.S. Department of Labor’s Bureau of Labor Statistics announced on the same day that the U.S. Producer Price Index (PPI) for April rose 1.4% from the previous month. This is the highest monthly increase in four years since March 2022 (1.7%), and it far exceeded experts’ forecasts of 0.5%. The year-over-year increase was 6.0%, the highest since December 2022 (6.3%).

Nevertheless, the buying momentum in technology stocks did not abate. It appears that buying continued following reports that Jensen Huang, CEO of Nvidia, belatedly joined U.S. President Donald Trump’s delegation during his visit to China. CNBC assessed that semiconductor stocks have recently soared and, amid renewed enthusiasm for AI investments, are driving the broader market to all-time highs.

Ross Mayfield, an investment strategist at Baird, told CNBC, “Investors seem to believe that the demand and growth for semiconductors are structurally very robust, so other cyclical macroeconomic factors won't significantly alter those dynamics.” He added, “Even amid oil price volatility, investors apparently felt that investing in semiconductor stocks was safe, convinced that the AI boom would come regardless.”

Morgan Stanley strategists also noted that rising corporate earnings and solid U.S. economic growth contributed to driving the indices higher. The Morgan Stanley strategy team, led by Mike Wilson, projected that the S&P 500 index could climb to 8,300 within the next 12 months.

Max Kettner of HSBC Holdings also explained, “Earnings recovery and still-low positioning are offsetting the threat from rising bond yields, leaving room for further equity gains.” He added, “Despite geopolitical risks, concerns over private credit liquidity, and AI innovation, the resilience of earnings data supports our view.”

Meanwhile, on the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for June delivery fell 1.1% from the previous session to $101.02 per barrel. On the ICE Futures Exchange, Brent crude for July delivery declined 2.0% from the previous session to $105.63 per barrel.

This content was produced with the assistance of AI translation services.