Closing Bell: S&P Hits Record High as Markets Look Past Hot Inflation Data

Key Points 

• Major indices recovered from early losses on inflation concerns, with the Nasdaq leading gains. Small caps lagged and finished flat. 
• Wholesale inflation came in significantly higher than expected, with a broad-based surge led by energy and services. 

U.S. equities recovered from earlier session lows as markets digested hotter-than-expected inflation data. The S&P 500 advanced 0.58%, the Nasdaq 100 gained 1.04%, while the Russell 2000 lagged, finishing roughly flat. Communication Services, Information Technology, and Consumer Discretionary led, while Utilities and Financials underperformed. 

PPI Jumps 1.4% as Annual Rate Hits 6% on Broad-Based Pressures 

Wholesale inflation accelerated sharply in April. The Producer Price Index rose 1.4% month over month—more than double expectations—and pushed the annual rate to 6.0%, the highest since late 2022. Leading the broad-based surge was a sharp increase in services prices and a 2.0% gain in goods, driven largely by a spike in energy costs, particularly gasoline. Core PPI also came in hot, highlighting underlying inflation pressures for both processed and unprocessed goods, fueled by higher energy inputs and transportation costs. Overall, the report points to intensifying upstream price pressures, with strong services inflation and rising input costs suggesting continued pass-through risk to consumer prices in the months ahead. 

Alibaba Advances 8% on Trump-Xi Visit Despite Weak Earnings 

Alibaba (BABA) reported a weak Q4, with profitability falling sharply despite mixed operational trends. Adjusted EBITA declined steeply year-over-year, alongside a near-total collapse in adjusted profit, while revenue missed expectations. Strength in the Cloud Intelligence segment stood out, with strong double-digit growth and continued rapid expansion in AI-related revenue, signaling momentum in higher-margin, strategic businesses. However, core China e-commerce remained under pressure, with only modest revenue growth and a sharp decline in profitability due to heavy investment in quick commerce initiatives. 

Economic Events for Tomorrow 

8:30am: Retail Sales m/m 

8:30am: Unemployment Claims 

8:30am: Import Prices 

10:00am: Business Inventories  

10:15am: FOMC Member Schmid Speaks 

10:30am: Natural Gas Storage 

1:00pm: FOMC Member Hammack Speaks 

5:45pm: FOMC Member Williams Speaks 

7:00pm: FOMC Member Barr Speaks 

Earnings Calendar 

Before Market Open: LUNR, YETI 

After Market Close: AMAT, RUM, VUZI 

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