Author: Shen Chao TechFlow

If yesterday's market was hit by inflation data, today's market was hit twice and still stood up to dance, and it was dancing Tech House.

On May 13, another inflation data that made people frown. The April PPI skyrocketed by 6% year-on-year, the largest increase since December 2022; it surged by 1.4% month-on-month, far exceeding the market expectation of 0.5%. The core PPI was 4.4% year-on-year and 1% month-on-month, both are the highest levels since early 2022.

Looking at yesterday's CPI (3.8%) and today's PPI (6%), one sentence summary: The inflation not only did not turn back, but is also drilling deeper. The BLS report stated plainly: nearly 60% of the month-on-month increase in April PPI came from the service industry, where wholesale trade profit margins increased by 2.7% and transportation prices surged by 5%, which means tariff costs and energy costs are being passed from upstream energy companies to midstream logistics and distribution, leaving just the final mile to our bills.

Logically, with such data, the stock market should fall.

But today, the Nasdaq rose by 1.2% to 26,402.34 points, and the S&P 500 rose by 0.58% to 7,444.25 points. Both are historical highs.

Only the Dow fell by 0.14%.

This is the most interesting part of today's market, the inflation data hit the "economic fundamentals," but the market is not betting on fundamentals, but on politics.

First, let's look at a few numbers that will catch your eye:

• Nasdaq: +1.20%, closing at 26,402.34 points, a historical high
• S&P 500: +0.58%, closing at 7,444.25 points, a historical high
• Dow: -0.14%, closing at 49,693.20 points
• Russell 2000: +0.07%, closing at 2,844 points

But according to FactSet data, about two-thirds of the S&P 500 constituent stocks fell.

In other words, today's "historical high" is not a broad rally with big gains and small losses, but a narrow basis record supported by a tiny number of AI giants.

Nvidia rose over 2%, Micron rose over 4%, and the VanEck Semiconductor ETF (SMH) rose 2%. Semiconductor stocks, which were beaten down yesterday, rebounded today. AMD and Qualcomm also basically halted yesterday's downward trend.

On the Dow's side, Salesforce fell 2.81%, Home Depot fell 2.52%, and the communication and financial sectors declined, these two sectors are the most sensitive to interest rates, while the 10-year U.S. Treasury yield rose to 4.473% today, the highest level since July 2025. Both the 20-year and 30-year Treasury rates topped 5%, the highest since May 2025.

The bond market is saying "don't expect interest rate cuts this year, there may be increases," but the stock market is saying "I don’t care, the AI narrative is more important."

The fundamental reason for this divergence is a matter that hadn't fully fermented last night, but was ignited completely this morning, Nvidia CEO Jensen Huang boarded Air Force One at the last moment.

Here is what happened.

Trump left Washington on Wednesday, beginning his first official visit to China in ten years, set to meet Xi Jinping in two days, mainly discussing agricultural products, aircraft, rare earths, and continuing to maintain the trade truce reached last October. Huang was originally thought to be "absent" from the CEO delegation accompanying him.

However, while the plane was refueling in Anchorage, Alaska, Huang boarded Air Force One, alongside Musk. Trump described this delegation on Truth Social as "a group of brilliant people," and wrote: "I will ask Chairman Xi to 'open up' China so these brilliant people can work their magic."

Translated into market language, this means: The export ban on H200 chips to China may be loosened.

Nvidia's biggest wound over the past three years lies right here. Six months ago, before the meeting in Busan on October 30, Huang desperately lobbied for the lifting of the export ban on Blackwell chips to China, but ended up with Rubio, Greer, and Lutnick joining forces to press Trump, resulting in the topic being entirely removed from the summit agenda. Huang's "last-minute boarding" is a counterattack from the previous battle.

Buffett and veteran Wall Street investors know that when a CEO personally boards Air Force One to discuss contracts with a foreign country, the act itself is a positive signal, the outcome is secondary, the posture precedes the result. That day Nvidia rose 2.5%, pushing the entire semiconductor sector up.

Oil Prices: The Battle for $100, IEA Sounds New Alarm

WTI crude oil futures hovered around $102 on Wednesday, dropping below $102 at one point, and finally closed at about $101-102 per barrel. Brent hovered around $107.

The fact that oil prices "did not continue to rise" is one of the reasons the market was willing to take risks today, but the other side of the story is more grim:

The International Energy Agency (IEA) warned in its monthly report on Wednesday that global observable crude oil inventories are decreasing at a rate of about 4 million barrels per day, the fastest on record. The IEA stated that even if the war ends today, the oil market may not reach supply-demand balance until October.

Saudi Aramco's CEO Nasser said the day before that they are "losing 100 million barrels of supply per week." The IEA followed up with another blow today: in the past two and a half months, approximately 1 billion barrels of crude oil have disappeared from global supplies. This is the most direct and difficult-to-repair loss since the outbreak of the war in the Middle East.

The U.S. Energy Information Administration (EIA) also echoed with inventory data: last week, U.S. crude oil inventories plummeted by 4.3 million barrels, nearly double the expected amount.

Oil prices may briefly drop to $100, but this is a market supported by both "war premium" and "actual shortages." Until Iran stops provocations or a ceasefire is genuinely established, the logic that "breaking 100 is just a pullback" will persist.

Gold and Silver: Parting Ways

Gold fell for the second consecutive day on Wednesday, closing at $4,696 per ounce, down 0.39%.

However, silver continued its surge, briefly climbing to $88 per ounce, a two-month high.

Assets of the same kind, moving in opposite directions, this is the cleanest case of "narrative split" in the market today.

Gold fell because it is a purely safe-haven asset, most sensitive to rising real interest rates. Today, the 10-year U.S. Treasury yield hit a new high since July 2025, with the 20-year and 30-year yields exceeding 5%, breaking gold's hedging logic.

Silver rose because it is half a safe haven and half an industrial metal. AI data centers, solar panels, and electronic products all require silver. On the day Nvidia led the charge to new highs, silver rose along with the industrial demand story.

The Indian government also raised the import tariff on gold and silver from 6% to a significant 15% on Wednesday, which theoretically aims to curb demand, but silver didn't even react to this negative news; the market has assigned more weight to the industrial characteristics than the safe-haven properties.

Cryptocurrency: Low-Level Sideways Trading, Handing Fate to Trump

The keyword in the cryptocurrency market today is "wait."

Bitcoin fluctuated narrowly around $80,000, with around $80,304 quoted at 9 AM Eastern time according to Fortune; Ethereum barely moved around the $2,280 level. The total market capitalization was approximately $2.77 trillion, with Bitcoin's market share remaining around 58%.

But quiet does not mean safe.

First, the technicals are in a tough battle. CoinDesk's analysis pointed out that BTC is stuck between the 200-day moving average and the 200-day exponential moving average. $82,000 is a critical resistance in this range, and both bulls and bears are betting everything here. If it breaks upward, it can restart the uptrend; if it drops, it has to test $70,000.

Second, the tug-of-war between long-term holders vs. speculative traders is intensifying. On-chain data shows that the addresses known as "conviction buyers" have increased their holdings by 300% in the past six months, approaching 4 million BTC. But at the same time, net outflows from the Bitcoin spot ETF have reached about $4.5 billion since 2026, the worst start to the year since its launch in January 2024. One side is diamond hands that buy more as prices fall, while the other side is paper hands that sell more as prices rise, today's $80,000 is the battleground between these two opposing forces.

Third, everyone is waiting for Trump-Xi. The sideways movement in crypto over the last three days is essentially "I'll wait and see what happens in Beijing." If Trump-Xi manages to strike a deal on rare earths, AI chips, and extending the trade truce, global risk appetite will immediately open up, and BTC will surge toward $82,000; if the talks break down, coupled with the policy vacuum from Powell officially stepping down on Thursday and Warsh not yet taking office, Bitcoin's $70,000 will face a real pressure test.

It is noteworthy that today Coinbase displayed resilience in an environment where the crypto stocks were generally being bloodied, and Charles Schwab also began to open up Bitcoin and Ethereum spot trading to retail customers. This expansion at the infrastructure level and the price declines are separate, which is a structural positive but does not help prices in the short term.

Today's Summary: On the same day that inflation exploded, the market placed a bet on politics

On May 13, the market responded to the inflation data with an almost dark humor:

U.S. Stocks: PPI skyrocketed by 6%, a three-year high, yet the S&P 500 and Nasdaq both reached historical highs. However, only 1/3 of the constituent stocks were rising, with the market completely supported by Nvidia + Jensen Huang's "China concept."

Oil Prices: WTI pulled back to $102, yet the IEA warned that global crude oil inventories are disappearing at the fastest historical rate.

Gold/Silver: Gold fell to $4,696, while silver surged due to industrial demand, hitting $88, a two-month high, with safe-haven logic and industrial logic parting ways for the first time.

Cryptocurrency: Bitcoin hovered around $80,000, with Ethereum at around $2,280, as the entire market outsourced trading decisions to the Beijing meeting.

If deals are struck, even if partially, such as the release of H200 chips, guarantee of rare earth supply, and extension of the trade truce, AI stocks will counterattack in the face of a "dual hit" from inflation and rising interest rates, and Bitcoin will push towards the $82,000 resistance of the 200-day moving average.

If the talks fail, coupled with Powell's official resignation creating a policy vacuum, the market will have to face a more difficult reality: 6% wholesale inflation, 3.8% consumer inflation, oil prices above $100, and long-term bond yields above 5% cannot be digested by a few rebounds.

But at least for today, the market told the Fed with red candlestick after red candlestick: In the face of the AI narrative, even inflation has to queue up.