New York, May 13, 2026, 16:01 EDT
- The Dow Jones Industrial Average dropped 90.72 points, slipping 0.18% to end at 49,669.84.
- The S&P 500 climbed 0.57% while the Nasdaq advanced 1.12%, with chip and AI-linked stocks bouncing back to lift both indexes.
- Stubbornly high producer-price figures, paired with Kevin Warsh’s Fed confirmation, weighed on expectations for a rate cut.
The Dow Jones Industrial Average slipped late Wednesday, lagging behind as AI enthusiasm pushed the S&P 500 and Nasdaq higher. Sticky inflation numbers steered investors back toward a higher-for-longer rate outlook. The Dow lost 90.72 points, or 0.18%, settling at 49,669.84. The S&P 500 tacked on 42.43 points to close at 7,443.39, and the Nasdaq Composite jumped 292.20 points to 26,381.48, according to Reuters.
The gap stood out—tech remained the crutch for a narrow market, leaving rate-sensitive and defensive stocks trailing behind. PHLX Semiconductor Index bounced back 2.8%. Tech and communication services topped S&P 500 sector performance, while utilities sat at the bottom.
Wholesale inflation turned up the heat. The Labor Department reported its Producer Price Index—the measure of what businesses get before costs hit shoppers—jumped 1.4% in April. That’s the largest monthly increase since March 2022. Year-over-year, the PPI climbed 6.0%.
The report followed on the heels of hotter-than-expected consumer price numbers. For traders, the takeaway was clear enough: with energy prices and tariffs still in the mix, the Federal Reserve’s options for rate cuts look more limited. Boston Fed President Susan Collins told Reuters that if inflation doesn’t let up, raising rates is still on the table.
Jim Baird, chief investment officer at Plante Moran Financial Advisors, described to Reuters a market caught between “two significant catalysts”—robust earnings and inflation risk. He cautioned investors against downplaying the threat of persistently high inflation and interest rates. Reuters
Prediction markets echoed that sentiment. On Oddpool’s FOMC feed, Kalshi odds held steady at 97.0% for a Fed pause in June, with Polymarket’s figure a touch higher at 97.6%. For 2026, Polymarket’s separate contracts priced a 69% chance of zero cuts this year, and in its rate-hike market, the probability of at least one move up in 2026 landed at 33%.
The Senate confirmed Kevin Warsh as the next Fed chair, passing him by a 54-45 margin. Warsh is now lined up to preside over the June 16-17 policy meeting, Reuters said, as Jerome Powell’s tenure wraps up Friday.
Markets aren’t aligned on Warsh—some see him bowing to President Donald Trump’s push for lower rates, others expect a tougher stance on inflation. “A big problem for the bond market” is how Ryan Swift, chief U.S. bond strategist at BCA Research, put it to Reuters if Warsh signals an early dovish tilt. Reuters
The Dow’s losses weren’t spread evenly. According to Investing.com, names like Johnson & Johnson, 3M, Cisco, and Nvidia landed near the top of the leaderboard, while Salesforce, Home Depot, IBM, Sherwin-Williams, and Visa trailed. One thing to remember: the Dow tracks 30 U.S. blue-chip stocks and weights them by price, so a change in share price can sway the average more than shifts in market cap.
AI names pushed higher in other pockets. Nvidia advanced 2.4%, while Tesla jumped 3.5% as Trump landed in Beijing alongside Nvidia’s Jensen Huang and Tesla’s Elon Musk for discussions with China’s Xi Jinping, Reuters reported.
Earnings kept a floor under stocks. Morgan Stanley bumped its S&P 500 target to 8,000 from 7,800, citing solid company results and arguing there’s still upside for U.S. equities.
The danger here: the inflation spike slowing the Dow could start making more noise across the whole market. Higher oil—if it sticks—and persistent costs for producers filtering into what shoppers pay, that combo might drive bond yields up again. Any hope for Fed cuts in 2026 could slip off the table, and suddenly the tech rally doesn’t look as solid as Wednesday’s action implied.
