U.S. stock market trend | Nasdaq hits new high, rises over 1%; Nvidia up 2.8%

U.S. Producer Price Index (PPI) data for April far exceeded market expectations, reinforcing investors' forecasts that the Federal Reserve will keep interest rates unchanged this year, and even re-raise rates. U.S. stocks developed separately on Wednesday, with the Dow Jones Industrial Average dropping as much as 309 points to a low of 49,451 points, with a significant narrowing of the decline in the middle of the session; the S&P 500 and Nasdaq hit record highs during the day, with the tech-heavy Nasdaq rising over 1%.

PPI Boosts Expectations of High Federal Reserve Interest Rates

As of 1:11 a.m. Hong Kong time, the Dow was at 49,642 points, down 118 points or 0.24%; the S&P 500 was at 7,450 points, up 49 points or 0.66%; the Nasdaq was at 26,418 points, up 330 points or 1.27%.

Nvidia CEO Jensen Huang temporarily joined U.S. President Trump’s China visit delegation. Nvidia’s H200 chip may become one of the key topics at the upcoming U.S.-China summit. Nvidia’s stock price surged 2.8% to $226.96, hitting a record high, with a total market value reaching $54.6k. Micron’s stock once gained over 6%, Qualcomm rose 3.6%; Apple climbed 1.7%, and Amazon increased 1.6%.

Jensen Huang Joins Trump’s China Visit, Nvidia Shares Hit Record High

The final demand Producer Price Index (PPI) for April in the U.S. increased by 1.4% month-on-month and rose 6% year-on-year, both marking the largest increases in nearly three years; the core final demand PPI, excluding food and energy, rose 5.2% year-on-year, also the largest increase in over three years, indicating inflationary pressures have spread from energy prices to a broader range of production sectors.

After the data was released, markets adjusted their expectations for Federal Reserve policy. Traders further increased bets that the Fed will maintain high interest rates for a longer period, and some even re-anticipated rate hikes.

Clark Bellin, Chairman of Bellwether Wealth, pointed out that the April PPI data was notably high, indicating that companies are feeling the chain effects of oil prices at around $100 per barrel, with energy prices broadly pushing up production costs.

He stated that the Fed now faces a more challenging situation: on one hand, inflation is reigniting, and on the other hand, signs of cooling in the U.S. labor market make monetary policy decisions more difficult.