Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) finished the day in the green after reversing their early morning losses.
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Before the market open, the Bureau of Labor Statistics released its April price producer index (PPI) report. The PPI pointed to cooling inflation, with prices declining by 0.5% month-over-month compared to the expectation for a 0.2% jump. The PPI rose by 2.4% year-over-year, below the estimate for 2.5%. Traders now expect a 35.9% chance for a 25 basis point rate cut at the July Fed meeting, up from 32.5% yesterday.
Furthermore, chip stocks, like Nvidia (NVDA) and Advanced Micro Devices (AMD), were in the spotlight after it was reported that some Trump officials were concerned that chip shipments to the Middle East could benefit China. Earlier this week, President Trump signed a deal with Saudi Arabia that involves sending large quantities of chips to the Kingdom.
Trump could also sign a deal that sends 1.5 million Nvidia chips to the United Arab Emirates (UAE) through 2027. The two countries signed a “US-UAE AI Acceleration Partnership” today with the U.S. agreeing to establish an AI data center in the UAE.
In the afternoon, Fed Governor Michael S. Barr warned of an economic outlook “clouded by trade policies.” Barr added that small businesses faced the greatest risk from these policies and that a decline in small business could lead to higher inflation and lower growth.
Finally, in a potential sign of rising tensions, the U.S. has began taking action against the EU’s “European censorship regime.” The Department of State has kicked off the initiative by asking its European offices to find examples of censorship within the EU.
The S&P 500 closed Thursday with a 0.41% gain while the Nasdaq 100 inched higher by 0.08%.
