US Stock Market Alert: S&P 500, Nasdaq Hit Fresh Records Ahead of Donald Trump-Xi Jinping Meeting

US stocks extended their climb as the S&P 500 and Nasdaq notched fresh records on Wednesday, May 13, even after another strong US inflation reading. Investors chose to focus on the coming summit between US President Donald Trump and Chinese President Xi Jinping, betting that progress there will matter more for markets than the latest price shock.

The rebound followed brief profit booking in major semiconductor stocks, which had pulled back in the previous session. On Wednesday, the S&P 500 rose 0.6%, while the Nasdaq jumped 1.2%. The S&P 500 hit an intraday high of 7,460, and the Nasdaq touched 26,474. The Dow Jones lagged and slipped marginally, though it still recovered about 240 points from the day's low.

US inflation data and the S&P 500 and Nasdaq rally

Traders shrugged off the hotter-than-expected inflation surprise that landed just after a firm retail inflation print. For April, the Producer Price Index climbed 1.4% month-on-month, above forecasts for a 0.5% rise and higher than the revised 0.7% increase seen in March. Year-on-year, April PPI jumped 6%, the steepest gain since December 2022, while services prices advanced 1.2%, the sharpest monthly move since March 2022.

The strength of the S&P 500 and Nasdaq, despite those figures, underlined how narrow the rally has become. Nearly two-thirds of S&P 500 members still closed lower in mid-week trade, highlighting weak market breadth. This pattern suggests recent gains have been carried by a small group of large stocks, while many shares remain under pressure even as headline indices reach records.

Trump-Xi summit expectations and the S&P 500 and Nasdaq focus

Attention now turns to the planned meeting in Beijing between US President Donald Trump and Chinese President Xi Jinping, where issues such as rare earths, AI, Iran, Taiwan and tariffs are expected to dominate talks. Reports suggest both sides may use the visit to unveil a sizeable Chinese purchase of US planes or a major order of Soybeans from US farmers. Before the trip, US President Donald Trump posted on Truth Social that he expects "great things" from the summit.

Optimism around that meeting helped investors in the S&P 500 and Nasdaq look past the inflation risk. Many buyers appeared to treat recent weakness in technology and semiconductor names as a chance to enter at lower levels. Market participants are now watching whether any trade or investment pledges from Beijing can offset concerns that persistent price pressures could squeeze corporate margins in the coming quarters.

Oil prices, IEA warning and the S&P 500 and Nasdaq outlook

While equities pushed higher, oil prices paused after recent gains, with some profit booking taking place. Even so, crude remained close to the $105 a barrel mark. The International Energy Agency cautioned that prices could move higher during the peak summer demand period, especially if inventories keep falling. The agency's monthly report warned that rapidly shrinking stockpiles may tighten supply conditions further over the coming months.

Morgan Stanley echoed those concerns, projecting that the oil market could lose another billion barrels over 2026 because of the time needed to restore normal supply patterns. Such a decline in available barrels could keep energy costs elevated, which may feed back into inflation data like PPI and consumer prices. That risk remains a key factor for the S&P 500 and Nasdaq, even as traders stay focused on geopolitical talks.