Stocks Mixed Early as PPI Soars, Nvidia Jumps

Published as of: May 13, 2026, 9:24 a.m. ET

(Wednesday market open) U.S. wholesale prices skyrocketed in April far above consensus estimates, today's Producer Price Index (PPI) showed. Monthly PPI rose 1.4% and core-- excluding food and energy—surged 1%. Analysts had expected 0.4% and 0.3%. The report took some steam out of Wall Street's early rally, though the tech-heavy Nasdaq Composite remained up after the news. "The hot PPI data is sending yields sharply higher," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). "The headline number was bad, but stripping out energy costs still shows that there's inflation in the pipeline."

Before the swollen PPI data, stocks got a lift after Bloomberg reported that Nvidia (NVDA) CEO Jensen Huang would join President Trump and other U.S. executives on Trump's trip to China. Huang was not on the original guest list. Nvidia shares popped 2%, and other chip makers climbed too. U.S. export restrictions prevent companies from sending their most advanced chips to China, however, and Huang's presence isn't likely to change that. Other likely discussion items when President Trump and President Xi meet this week are expected to include the Iran war and U.S. access to Chinese rare earth materials.

On Tuesday, major indexes spent most of the session below sea level, though the S&P 500 Index and the Dow Jones Industrial Average managed to claw back from lows while tech stocks sagged. Annual Consumer Price Index (CPI) gains topped estimates, sending odds of a rate hike much higher and wiping out most chances of a 2026 rate cut, futures trading indicated. Tepid demand for 10-year Treasury notes at an auction Tuesday gave yields another boost and added to pressure on stocks as oil rose 4% yesterday before leveling off this morning.

1. PPI deeper dive: The 10-year Treasury yield traded at 4.48% shortly after the PPI data, touching its highest levels of the year and reinforcing the likelihood of tighter monetary policy. The headline PPI doesn't worry analysts as much as core because headline reflects what's obvious to anyone who's pumped gas lately. The concern is that high energy costs are starting to show up in the broader economy. Sometimes this first shows up in wholesale prices, eventually leaving companies the choice of raising prices or eating the costs and taking a hit to margins. Neither option is market friendly. Some areas where core PPI rose included home health and nursing home care, along with domestic air travel up 3% month over month. "The concern is that we've already seen an increase in prices broadly and this suggests that there may be more pain to come," Howard said. The report also revised March PPI growth higher, to 0.7% for headline and 0.2% for core. Year over year, PPI rose 6%, versus 4.3% in March, the biggest annual climb since December 2022.
    
2. Warsh arrives as Fed's hands look tied: Kevin Warsh, who has advocated for lower rates in the past, is expected to take over as the next chair of the Federal Reserve when Chairman Jerome Powell's term expires Friday. Warsh is only one vote on the committee, though. "We don't believe the Fed will aggressively shift to an easing bias," Howard said. "We expect the Fed to be on hold for the time being due to a stable labor market and concerns that inflation could accelerate." The market seems to think the same, and this week's hot CPI and PPI data gave Warsh an unfriendly welcome. Futures trading early today shows just a 3% chance of a rate cut at any point this year, with 36% chances of a rate hike, according to the CME FedWatch Tool. That leaves about three in five chances of rates being at their current 3.5% to 3.75% range by year-end. Looking ahead more than a year to June 2027, odds are stacked more in favor of hikes, with chances of higher rates at roughly 60%, up heavily from before yesterday's CPI report. While this implies the Fed has an inflation fight on its hands, the positive feature is that futures trading doesn't see much chance of a recession that might require rate cuts.
    
3. Under the surface, vulnerability evident: Bloomberg recently detailed an interesting phenomenon in the options market.  Beneath the S&P 500's strong recent gains, market internals are flashing unusually speculative behavior—especially a record surge in gamma, very low stock correlation, and extreme dispersion driven by heavy call buying in a small group of semiconductor names. That combination has only appeared once before in a similar form, in late 2021, shortly before the broader market peaked and rolled into a bear market. The article suggests this doesn't mean the rally ends immediately, but it does indicate the market may be entering a late-stage, more fragile phase where upside can continue briefly even as risks build. In short, the rally still has momentum, but the underlying setup looks increasingly frothy and vulnerable.

• Alibaba (BABA) dropped 1.8% in early trading after the Chinese retail giant missed analysts' quarterly revenue expectations. Revenue climbed 2.9% annually, possibly reflecting weak consumer demand in China. Profitability also dropped as the company spent heavily on tech, while its cloud growth accelerated, CNBC noted.
   
• Cisco (CSCO) dipped marginally ahead of its earnings report due after today's close. Last time out, in February, Cisco topped analysts' earnings and revenue estimates but appeared to disappoint with quarterly earnings guidance that merely met the consensus views. Typically, Cisco's networking business is the key element to monitor. It rose 21% in the previous quarter.
   
• Qualcomm (QCOM) fell almost 12% Tuesday. Caution from a well-known analyst appeared to hurt shares. The analyst seemed skeptical about Qualcomm establishing itself as a major AI data center player.
   
• Memory chip stocks—on a roll recently amid shortages and rising product prices—surged early today after dropping Tuesday in what might have been profit taking. SanDisk (SNDK) fell 7% while Micron (MU) and Western Digital (WDC) fell 5% and 6%, respectively, on Tuesday. This morning, however, Micron was up 5% and SanDisk rose 4%.
   
• Lumentum (LITE) climbed another 5% after Monday's double-digit gains. Shares of the tech infrastructure maker sold off following earnings last week but have been on the rise since Lumentum was added to the Nasdaq-100^® (NDX), which contains the largest 100 non-tech stocks in the Nasdaq. Being added to an index means mutual funds that track the index need to add shares.
   
• Technology stocks sagged in general yesterday, even beyond chips, possibly a sign of "risk-off" moves by investors concerned by rising crude, higher yields, and lack of progress on Iran. One day isn't a trend, however.
   
• Healthcare shares found a bid yesterday, rising more than 2% and led by Humana (HUM) and UnitedHealth (UNH). Health care might have been helped by news that Marty Makary resigned as commissioner of the Food and Drug Administration (FDA) after what CNBC called a "controversial" tenure.

Foreign investors in U.S. markets—tax considerations: For overseas investors who aren't U.S. citizens or residents, U.S. financial markets are available for investing but with certain tax obligations. Learn about these and other considerations in our latest tax planning piece.

AI and emerging markets: Although the MSCI Emerging Market Index is expected to show rapid earnings growth in 2026, it seems to be attributable to an outsized impact of a few semiconductor companies. The Iran war and energy shock disrupted the supportive EM environment, as well. Learn more about trends in EM stocks in up-to-date analysis on international investing.
 

The 10-year Treasury note yield (TNX:CGI—candlestick) is nearing its 2026 high, closing at 4.46% yesterday. The high was 4.48% in March. At the same time, the PHLX Semiconductor Index (SOX—purple line) has risen 64% since the end of March. This is unusual, as rising yields often make investors more cautious about embracing riskier tech stocks. The AI data center build-out and its possible impact on chip makers' and chip infrastructure providers' future earnings for now is going against the grain as investors in the sector appear to ignore traditional stoplights.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

May 14: April retail sales and expected earnings from Applied Materials (AMAT).
May 15: April industrial production and capacity utilization.
May 18: Expected earnings from Baidu (BIDU).
May 19: Expected earnings from Home Depot (HD), Toll Brothers (TOL), and Cava Group (CAVA), and April housing starts and building permits.
May 20: FOMC minutes and expected earnings from Nvidia (NVDA), Analog Devices (ADI), TJX Companies (TJX), Lowe's (LOW), Williams-Sonoma (WSM) and Intuit (INTU).