Tech Keeps Dragging the S&P 500 to Records While Most Stocks Sit This One Out

Reuters, the Wall Street Journal, and CNBC contributed to this report.

The S&P 500 pushed to another intraday record Wednesday, but this was not a broad market victory lap. It was mostly a tech story, with chip stocks doing the heavy lifting while a hotter-than-expected inflation report and rising energy prices kept a lot of other sectors in the mud.

The broad index was up 0.6%, and the Nasdaq climbed 1.2%. The Dow, though, slipped 154 points, or 0.3%. Dig a little deeper and the split gets even sharper: about two-thirds of S&P 500 names were lower on the day, according to FactSet.

That weakness showed up in the usual places. Retailers, banks and other cyclical stocks were under pressure as traders kept one eye on inflation and the other on the Iran war, which has kept oil prices elevated. Home Depot fell. JPMorgan was lower too. Meanwhile, the chip trade barely blinked.

Nvidia rose more than 2%. Micron added over 3%. The VanEck Semiconductor ETF was up 2%. The message from traders was pretty clear: if the market is nervous about the broader economy, it still sees AI and semiconductors as the safest place to hide.

Ross Mayfield of Baird said the chip rally has started to feel like its own ecosystem, almost separate from the rest of the market. Investors, he said, seem convinced the AI boom is structural enough to keep rolling even if the macro backdrop gets uglier.

That confidence got a small boost from the Trump-Xi trip too. Nvidia CEO Jensen Huang joined President Donald Trump on the China visit, which investors read as a possible sign that the company could get some room to keep selling AI chips in China. Mayfield said he was not expecting a huge breakthrough, but the market clearly liked the symbolism.

Still, inflation is not helping the rest of the market get comfortable. On Wednesday, the producer price index jumped 1.4% in April, the biggest monthly increase since March 2022 and far above economists’ expectations. Wholesale inflation was up 6% from a year earlier, also hotter than forecast.

That comes after Tuesday’s consumer inflation report already rattled traders. So the market is stuck with two very different moods at once: one part sprinting ahead on AI enthusiasm, the other getting tugged back by rising prices and energy shock fears.

For now, tech is winning the day. Everything else is mostly just trying to keep up.