In premarket trading, the S&P 500 and Nasdaq were set to recover some ground, helped by a rebound in chip-related stocks and a pullback in oil after three days of gains. But then the Producer Price Index added another layer of inflation anxiety. April PPI came in far hotter than expected, with annual producer prices rising 6.0%, compared with forecasts for 4.9%. The previous reading was 4.3%. PPI measures prices businesses receive before many of those costs reach households. It is not the same as consumer inflation, but it is often the receipt businesses hand to the economy before consumers get the bill.

And consumers already got a bad one yesterday. April CPI rose 3.8% from a year earlier, its highest pace since 2023, while core CPI rose 2.8%. Put simply: inflation is no longer just a theoretical risk from tariffs, energy, and geopolitics, it is now showing up in the numbers.

For the Fed, this is a narrowing corridor. Markets have already largely priced out the idea of a rate cut this year, and the odds of a rate increase by December have risen. That is a major shift from the easy-money hopes that helped support risk assets earlier in the year. The Fed does not need to panic, but it has less room to be generous. 

The timing is also politically awkward. Kevin Warsh has just been confirmed to the Fed board and is expected to take over as chair after Jerome Powell's term ends this week. His first policy meeting as chair, in mid-June, may arrive with inflation running too hot, energy prices still fragile, and markets wondering whether the next move is not a cut, but a hike. That is not the kind of welcome basket anyone wants.

Meanwhile, Donald Trump is heading into a high-stakes visit with Chinese President Xi Jinping in Beijing. Trade will be the official centerpiece, with Washington pressing China to open more to U.S. companies. Nvidia CEO Jensen Huang has finally been confirmed as part of the business delegation.

Rare earths are also on the agenda, with the two countries considering extending a truce on Chinese export curbs, which would be good news for technology, defense, electric vehicles, and the broader supply chain. But Iran will still hover over the meeting. Trump has said he does not expect to ask Xi for help resolving the conflict with Tehran, yet the war's economic effects are already forcing their way into U.S. inflation data and global markets.

Yesterday's session showed how quickly the market can rotate when inflation hardens. The S&P 500 and Nasdaq slipped from record highs after the CPI report, though losses narrowed by the close. The Dow even finished higher, helped by older, steadier companies. Healthcare performed well after the removal of FDA Commissioner Marty Makary reassured investors that the drug industry still knows how to defend its turf. Washington may change personnel lobbyists rarely miss a workout.

Technology was another story. Investors took profits in semiconductor names, the favorite trade of the year. The Nasdaq 100 fell, and chip stocks were hit harder. Today's early rebound in Micron, Western Digital, Seagate, and SanDisk suggests the selloff may have been contained, at least for now. But the inflation backdrop makes the tech rally more fragile. High-growth stocks do not love higher rates. They tolerate them only when earnings are spectacular and investors are feeling forgiving.

Today's economic highlights:

See the full calendar here.

  • Dollar index: 98.576
  • Gold: $4,681
  • Crude Oil (BRENT): $107.92 (WTI) $102.53
  • United States 10 years: 4.48%
  • BITCOIN: $80,151

In corporate news:

  • Eli Lilly launched its Alzheimer's treatment Lormalzi, also known as Donanemab, in India, priced at 91,688 rupees per 350 mg vial and expected to become commercially available later this month.
  • Fortive priced a $1.1 billion senior notes offering and plans to use the proceeds to refinance debt and for general corporate purposes.
  • Pfizer's COVID-19 vaccine is not known to trigger hantavirus infection, according to a Reuters fact-check.
  • Blackstone reportedly abandoned a proposed $4 billion deal with New World Development after the Hong Kong property developer refused to cede control.
  • Uber said it is setting up its first data center in India in partnership with Adani Group, with completion expected later this year.

  • JBS reported first-quarter revenue growth but lower earnings, with EPS falling to $0.21 from $0.47 a year earlier.
  • Tencent Music posted higher first-quarter revenue driven by music subscriptions and live entertainment, while profit fell due to the absence of a prior-year one-off gain.
  • Brown-Forman has rejected Sazerac's takeover bid of $32 per share, following the collapse of its merger with Pernod-Ricard.
  • JPMorgan is set to reshuffle the leadership of its investment bank as part of a broader restructuring, according to the FT.
  • Franco-Nevada reports record results for the first quarter of 2026.
  • Jensen Huang of Nvidia will ultimately join Donald Trump's trip to China.
  • The Wendy's Company surged 17% following rumors of a delisting plan orchestrated by Trian Fund Management.
  • Microsoft has generated more than double its $13 billion investment in OpenAI in revenue, according to The Information.
  • Anthropic is in talks to acquire Stainless, the development tools startup used by OpenAI and Google, The Information reveals. Google is reportedly in talks with SpaceX to launch orbital data centers, according to the WSJ.
  • Samsung Electronics and its union failed to reach a major wage agreement, causing the company's stock price to plummet.
  • Today's key earnings reports: Cisco, Robinhood, Robinhood Markets, Dynatrace, Doximity...

Analyst Recommendations:

  • Matador Resources Company: Gerdes Energy Research LLC upgrades to buy from neutral with a price target raised from USD 68 to USD 69.
  • The Mosaic Company: RBC Capital upgrades to outperform from sector perform and reduces the target price from USD 28 to USD 27.
  • Venture Global, Inc.: Citi upgrades to buy from neutral and raises the target price from USD 12 to USD 17.
  • Zebra Technologies Corporation: KeyBanc Capital Markets upgrades to overweight from market weight with a target price of USD 305.
  • Aecom: Citi maintains its buy recommendation and reduces the target price from USD 130 to USD 98.
  • Bloom Energy Corporation: Clear Street LLC maintains its hold recommendation and raises the target price from USD 188 to USD 250.
  • Casey's General Stores, Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 780 to USD 1000.
  • Datadog, Inc.: Daiwa Securities maintains its buy recommendation and raises the target price from USD 190 to USD 240.
  • Doordash, Inc.: CITIC Securities Co Ltd maintains its add recommendation and reduces the target price from USD 232 to USD 172.
  • Fortune Brands Innovations, Inc.: Deutsche Bank maintains its hold recommendation and reduces the target price from USD 56 to USD 42.
  • Humana Inc.: Piper Sandler & Co maintains its neutral recommendation and raises the target price from USD 182 to USD 254.
  • Kilroy Realty Corporation: Jefferies maintains its buy recommendation and raises the target price from USD 30 to USD 38.
  • Murphy Oil Corporation: Scotiabank maintains its sector perform recommendation and raises the target price from USD 31 to USD 44.
  • Nextpower Inc.: JP Morgan maintains its overweight recommendation and raises the target price from USD 125 to USD 155.
  • On Holding Ag: KeyBanc Capital Markets maintains its overweight recommendation and reduces the target price from USD 58 to USD 43.
  • Oracle Corporation: Wedbush maintains its outperform rating and raises the target price from USD 225 to USD 275.
  • Ralliant Corporation: Barclays maintains its overweight recommendation and raises the target price from USD 52 to USD 67.
  • Twilio Inc.: Daiwa Securities maintains its outperform rating and raises the target price from USD 126 to USD 220.