The S&P 500 climbed to another record high on Wednesday as investors piled back into semiconductor and artificial intelligence-linked stocks, brushing aside another hotter-than-expected inflation reading.
The benchmark index rose 0.58% to close at 7,444.25, while the May 14 Polymarket contract implied a 77% probability of the S&P 500 opening higher on Thursday.
Why That Number Matters
Markets continued to digest April’s producer price index report, which showed wholesale inflation rising 1.4% on the month — the largest monthly increase since March 2022 and well above economist expectations for a 0.5% gain.
The inflation data added to concerns that elevated energy prices linked to the Iran war could keep price pressures higher for longer.
At the same time, investors are watching developments from President Donald Trump‘s visit to China, where tech titans, including Tesla (NASDAQ:TSLA) CEO Elon Musk and Nvidia (NASDAQ:NVDA) CEO Jensen Huang joined meetings with Chinese President Xi Jinping, fueling hopes around future AI chip access to Chinese markets.
The Bull Case
Technology and semiconductor stocks continued to drive the broader market higher despite macroeconomic concerns.
Shares of Nvidia gained more than 2% on Wednesday, while Micron Technology (NASDAQ:MU) rose over 4%. The VanEck Semiconductor ETF (NASDAQ:SMH) also advanced 2%.
Investors remain optimistic that AI-related demand and capital expenditure trends can continue supporting earnings growth even as other parts of the market struggle with inflation and higher oil prices.
In Thursday after-hours trading, shares of network equipment maker Cisco Systems (NASDAQ:CSCO) surged 19% after posting earnings and guidance above Wall Street expectations.
Still, the rally in equities remained narrow, with roughly two-thirds of S&P 500 stocks finishing lower on Wednesday.
Higher energy prices and inflation fears continued weighing on economically sensitive sectors, including financials and retail stocks.
Investors will also monitor earnings from companies such as Applied Materials (NASDAQ:AMAT) and Klarna (NYSE:KLAR), alongside key economic data including April’s retail sales, import price index and weekly jobless claims.
S&P 500 futures edged up 0.12% early Thursday, signaling expectations for another muted but positive start to trading.
How The Previous Bet Played Out: The S&P 500 opened Wednesday at 7,409.12, above Tuesday’s close of 7,400.96, meaning the May 13 Polymarket bet resolved “Up.” The contract recorded traded volumes of approximately $122,498 before settling.
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