U.S. stock markets closed mixed on Wednesday following hotter-than-expected key inflation data. Market participants also weighed developments in the Middle East geopolitical conflicts and the upcoming U.S.-China summit. The Dow ended in negative territory while both the S&P 500 and the Nasdaq Composite finished at record-high levels. 

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.14% to close at 49,693.20. Notably, 15 components of the 30-stock index ended in positive territory while 15 ended in negative territory. 

The tech-heavy Nasdaq Composite finished at 26,402.34, advancing 1.2% or 314.14 points due to the solid performance by technology bigwigs. This marked the tech-laden index’s new record close. The index touched an intraday all-time high of 26,474.18. 

The S&P 500 gained 0.5% to finish at 7,444.25, reflecting the benchmark’s new record closing high. The index touched an intraday all-time high of 7,460.04. Seven out of 11 sectors of the broad-market index ended in positive territory while four ended in negative territory. 

The Health Care Select Sector SPDR (XLV) and the Consumer Staples Select Sector SPDR (XLP) rose 2% and 1.3%, respectively. On the other hand, the Information Technology (XLK) fell 1.5%. 

The fear gauge CBOE Volatility Index (VIX) was down 0.7% to 17.87. A total of 19.03 billion shares were traded on Wednesday, higher than the last 20-session average of 18.12 billion. Decliners outnumbered advancers on the NYSE by a 1.21-to-1 ratio. On the Nasdaq, a 1.08-to-1 ratio favored declining issues.

U.S.-China Summit Meet

Market participants are keenly awaiting the upcoming tour of President Donald Trump to China, where he will meet the Chinese Premier Xi Jinping. The two leaders are expected to discuss bilateral trade and tariffs  as well as artificial intelligence-related issues. Also, U.S. arms sales to Taiwan will be discussed in the meeting. 

The Chinese authority is critical of the Trump administration’s AI policies, which China considers a hurdle to its own AI growth. Notably, President Trump is accompanied by the big corporate CEOs, namely, Jensen Huang of NVIDIA Corp. (NVDA Quick QuoteNVDA - Free Report) , Elon Musk of Tesla Inc. (TSLA Quick QuoteTSLA - Free Report) and Tim Cook of Apple Inc. (AAPL Quick QuoteAAPL - Free Report) . NVIDIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Middle East Conflicts

The Middle East geopolitical conflicts between Iran and the United States remained unresolved. In order to end the war, Iran has demanded war reparations, full sovereignty over the Strait of Hormuz, the release of frozen Iranian assets and the lifting of economic sanctions. President Trump called this demand totally “unacceptable”. Trump said that the ongoing ceasefire between the two countries is “unbelievably weak” and “on massive life support”.

Economic Data

The Department of Labor reported that the headline producer price index (PPI) rose 1.4% in April, significantly above the Zacks Consensus Estimate of 0.5%. The metric for March was also revised upward to 0.7% from 0.5% reported earlier. April’s data marked the highest monthly gain of headline PPI since March 2022. Year over year, headline PPI advanced 6%, the biggest monthly increase since December 2022.

The core PPI (excluding volatile food and energy items) rose 1% in April, higher than the Zacks Consensus Estimate of 0.4%. Core PPI (excluding food, energy and trade services) increased 0.6% in April. The metric for March was also revised upward to 0.3% from 0.2% reported earlier.

For the week ended May 8, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.3 million barrels from the previous week.