The New York stock market opened mixed as a surge in the U.S. producer price index (PPI) and strength in semiconductor stocks intersected. While an inflation reading that far exceeded expectations tempered hopes for rate cuts, a semiconductor rally led by Nvidia was propping up tech shares.
As of 9:40 a.m. on the 13th, the Dow Jones Industrial Average on the New York Stock Exchange (NYSE) was down about 0.5% to 0.6% from the previous session. The Standard & Poor's (S&P) 500 was little changed, while the tech-heavy Nasdaq was higher.
The market is digesting the U.S. producer price index for April released that day. According to the Labor Department, April PPI rose 1.4% from the prior month, far above the market forecast of 0.5%. It was the largest monthly gain since March 2022.
The year-over-year increase came in at 6.0%, and core PPI, excluding food and energy, also rose 1.0% from the previous month, topping projections.
With producer prices coming in hot following the consumer price index (CPI) released the day before, concerns grew in the market that the Federal Reserve's rate cut timing could be pushed back further. Weakness in industrials and real estate-related names was also seen as reflecting this impact.
Semiconductor stocks, on the other hand, extended gains. News that Nvidia Chief Executive Officer Jensen Huang joined U.S. President Donald Trump's trip to China boosted investor sentiment. The market viewed it as reflecting expectations for an expansion of Nvidia's AI Semiconductor supply to China.
Nvidia shares were up around 1% to 2% early, and major chip names such as Micron Technology also gained.
International oil prices continued to rise. West Texas Intermediate (WTI) June futures were transaction at around $102 per barrel. Tensions in the Middle East and concerns over prolonged U.S.-Iran friction appeared to be supporting prices.
Major European stock indexes were mostly higher. Germany's DAX and the Euro Stoxx 50 rose, while France's CAC 40 fell.