United States benchmark indices finished Wednesday’s (Thursday AEST) session in mixed territory, with the S&P 500 and Nasdaq Composite closing at fresh record highs as investors shrugged off stronger-than-expected inflation data and growing expectations that the Federal Reserve will maintain restrictive monetary policy for an extended period.
The Dow Jones Industrial Average fell 67.4 points, or 0.1%, to 49,693.2. The S&P 500 gained 43.3 points, or 0.6%, to 7,444.3, while the Nasdaq Composite climbed 314.1 points, or 1.2%, to 26,402.3.
Technology stocks outperformed broader markets as concerns about rising inflation and elevated energy prices linked to the Iran conflict weighed on sectors including retail and banking.
Nvidia shares rose 2.3%, while Micron Technology advanced 4.8%.
President Donald Trump arrived in Beijing alongside a delegation that included Nvidia Chief Executive Officer Jensen Huang and Tesla Chief Executive Officer Elon Musk ahead of a two-day summit with Chinese President Xi Jinping.
Discussions between the two leaders are expected to focus on encouraging China to further open its markets to U.S. businesses and preserving the fragile trade truce between the world’s two largest economies.
Trump is also seeking to strengthen domestic approval ratings that have come under pressure amid the Iran conflict and rising oil prices.
The summit comes as China continues to criticise U.S. arms sales to Taiwan and proposed U.S. legislation aimed at restricting Chinese semiconductor companies from producing advanced artificial intelligence chips.
Ford Motor surged 13.2%, marking its biggest one-day percentage gain in six years, after Morgan Stanley said the automaker’s energy business and partnership with Chinese battery producer CATL represented an "underappreciated strategic competitive advantage".
Nebius Group jumped 15.7% after the artificial intelligence cloud company reported an almost eightfold increase in quarterly revenue.
Cryptocurrency-related stocks moved lower, with Coinbase Global declining 2.8% and Strategy falling 3.5% amid weakening Bitcoin and Ethereum prices.
Economic data released during the session showed that the U.S. producer price index (PPI) rose 1.4% last month, outpacing an expected gain of 0.5% and marking the largest monthly increase in four years.
The increase was largely attributed to crude oil supply disruptions following the closure of the Strait of Hormuz.
The report also indicated that higher oil prices were beginning to spread through broader areas of the economy, reinforcing concerns that inflation pressures are becoming more entrenched.
Recent inflation readings have further reduced expectations for a near-term interest rate cut from the Federal Reserve.
Boston Federal Reserve President Susan Collins said on Wednesday that an interest rate increase could still be possible if inflationary pressures persist.
Meanwhile, Kevin Warsh, President Trump’s nominee to replace Federal Reserve Chair Jerome Powell, was confirmed by the Senate in a party-line vote.
On the bond markets, the benchmark 10-year Treasury yield rose 0.1% to 4.467%, while the two-year Treasury yield slipped 0.4% to 3.977%.
