Nasdaq, S&P 500 Hit Fresh Highs as Tech Stocks Rise

The Nasdaq Composite and the S&P 500 reached fresh peaks on Wednesday, buoyed by a rally in technology stocks ahead of high-stakes talks between US President Donald Trump and his Chinese counterpart, Xi Jinping.

The Nasdaq rose 1.2% to 26,402.3 and the S&P 500 climbed 0.6% to 7,444.3. The Dow Jones Industrial Average slipped 0.1% to 49,693.2. Most sectors ended in the green, led by communication services, followed by tech, while utilities saw the steepest decline.

Chipmaking giant Nvidia's (NVDA) shares jumped 2.3%, among the best performers on the Dow. Apple (AAPL), Amazon.com (AMZN), and Cisco Systems (CSCO) also advanced. On Semiconductor (ON) shares surged 11%, the second-biggest gainer on the S&P 500.

Trump arrived in Beijing Wednesday, accompanied by Nvidia Chief Executive Jensen Huang, Apple's Tim Cook, and Tesla (TSLA) CEO Elon Musk, along with other executives. Trump is set to have talks with Xi on Thursday and Friday, CNBC reported.

"The trip underscores the stakes for chips, tech, and the (artificial intelligence) supply chain highlighted by Nvidia's most advanced chips, which (have) faced a series of tightening US export restrictions on China sales," Wedbush Securities said in note.

"We believe that this summit will prove 'constructive' as it keeps the conversation focused on reopening channels where possible rather than allowing the relationship to drift into a more permanent Cold War dynamic that would ultimately slow AI diffusion and cloud monetization on both sides," Wedbush said.

US Treasury yields were little changed in Wednesday late-afternoon trade, with the 10-year and two-year rates at 4.48% and 3.99%, respectively.

In economic news, US producer prices in April rose at the fastest pace in four years as broad-based increases in services and goods signaled intensifying inflation pressures, official data showed.

"On the heels of yesterday's disappointing (consumer price index) results, the April producer price report flags intense inflation pressure in the pipeline," BMO Capital Markets said in a note. "Look for another heated consumer inflation report in May, and not solely due to costlier gasoline, as price pressures stemming from the Iran war are bleeding into other sectors of the economy."

The central bank last month held rates steady for a third straight meeting and is widely expected to do so again in June, according to the CME FedWatch tool.

The US Senate confirmed Kevin Warsh's nomination as Fed chair on Wednesday. Warsh is Trump's pick for the job as the term of current central bank chief Jerome Powell is set to expire on Friday.

Boston Fed President Susan Collins expects the central bank to maintain its current monetary policy stance, which she described as "slightly restrictive."

"More than five years of above-target inflation has reduced my patience for 'looking through' another supply shock," Collins said in prepared remarks on Wednesday. "And while it is not

in my most likely outlook, I could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2% in a timely manner."

West Texas Intermediate crude was last down 0.9% at $101.27 a barrel, while Brent fell 1.8% to $105.85.

The International Energy Agency forecast a sharper decline in global oil demand this year than previously expected as the Middle East conflict drives up energy prices.

"More than 10 weeks after the war in the Middle East began, mounting supply losses from the Strait of Hormuz are depleting global oil inventories at a record pace," according to the report.

Separately, the Organization of the Petroleum Exporting Countries reduced its global oil demand growth outlook for 2026, but upgraded its projection for next year.

Trump recently rejected Iran's counteroffer to end the war, though a fragile ceasefire between the two countries still holds.

In company news, Wix.com (WIX) logged a larger-than-expected annual decline in its first-quarter earnings, while the Israeli web development platform maintained its full-year outlook. The company's US-listed shares tanked 27%.

Gold was last up 0.2% at $4,694.70 per troy ounce, while silver climbed 3% to $88.18 per ounce.

Cisco Systems Tops Third-Quarter Views, Announces Layoffs

Cisco Systems' (CSCO) fiscal third-quarter results exceeded Wall Street's estimates, while the networking equipment maker announced a restructuring plan that involves thousands of layoffs.For the quarter ended April 25, Cisco's adjusted EPS increased to $1.06 from $0.96 a year ago, topping the FactSet-polled consensus of $1.03. Revenue grew 12% to $15.84 billion, ahead of the Street's $15.56 billion view."Cisco delivered record quarterly revenue in (the third quarter) and we saw very strong, broad-based demand for our products, demonstrating the relevance of our technology for connecting and securing (artificial intelligence)," Chief Executive Chuck Robbins said in a statement.Product sales climbed 17% to $12.12 billion, while services revenue dropped 1% to $3.72 billion.Cisco highlighted "significant momentum and raised expectations for AI infrastructure from hyperscalers."The company would reduce its workforce by "fewer than" 4,000 people, reflecting less than 5% of the total employee base, Robbins said in a staff memo shared on the company's website.The move is part of a restructuring plan aimed at enabling the company to invest in growth opportunities, including silicon, optics, security and AI."The companies that will win in the AI era will be those with focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest," Robbins said. "I'm confident Cisco will be one of those winners. This means making hard decisions -- about where we invest, how we're organized, and how our cost structure reflects the opportunity in front of us."Cisco shares jumped 15% in after-hours trading. The stock is up 32% so far this year as of Wednesday close.The company expects to record pre-tax restructuring charges of up to $1 billion, mostly consisting of severance and other one-time termination benefits. Some $450 million of these will be recorded in the fiscal fourth quarter.Cisco forecasts adjusted EPS between $1.16 and $1.18 for the ongoing three-month period, while revenue is pegged at $16.7 billion to $16.9 billion. The Street is looking for non-GAAP EPS of $1.08 and sales of $15.82 billion.Cisco now expects adjusted EPS of $4.27 to $4.29 for fiscal 2026, up from the previous guidance of $4.13 to $4.17. Revenue is projected to come in at $62.8 billion to $63 billion, versus the prior outlook of $61.2 billion to $61.7 billion. The market's forecast is for non-GAAP EPS of $4.16 and sales of $61.59 billion.

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US Senate Confirms Kevin Warsh as Next Fed Chair

The Senate confirmed Kevin Warsh as the next Federal Reserve chair in a 54-45 vote on Wednesday.Warsh is US President Donald Trump's pick to replace Jerome Powell, whose term as Fed chief expires on Friday.The Senate on Tuesday approved Warsh as a governor on the Fed board, bringing Stephen Miran's term to an end. Trump-nominee Miran filled the seat vacated by Adriana Kugler, who resigned in August 2025 as Fed governor.Warsh served as a governor on the central bank's board from 2006 to 2011. Before joining the Fed, he was part of the George W. Bush White House and had worked at Morgan Stanley (MS).Trump has repeatedly criticized Powell for the central bank's cautious view on lowering interest rates.Powell, whose term on the Fed's Board of Governors runs through January 2028, said last month that he will stay on as a Fed governor for an indefinite period after his term as Fed chair expires.Last month, the central bank's Federal Open Market Committee kept its policy rate unchanged for the third consecutive meeting, saying the Middle East conflict is fueling uncertainty about the US economic outlook.US annual consumer inflation accelerated to 3.8% year over year in April, the highest print since May 2023, the Bureau of Labor Statistics reported Tuesday. The Fed targets a 2% long-run rate, as measured by the annual change in the personal consumption expenditures price index.

Elf Beauty Likely to Post In-Line Earnings as Investors Brace For Conservative Guide, UBS Says

Elf Beauty (ELF) is expected to post fiscal fourth-quarter earnings in line with Wall Street's estimates, though investors are anticipating a conservative full-year outlook, UBS Securities said in a note.The brokerage forecasts $0.29 in earnings per share at the cosmetics company for the quarter. The FactSet-polled consensus estimate is for $0.30 in adjusted EPS."We think the quarter itself will likely be solid and would not be surprised if top-line growth came in ahead of consensus driven by stronger results from Rhode," UBS analyst Peter Grom said in a note to clients.Makeup and skincare brand Rhode, which Elf acquired in 2025, is expected to bring in $95 million in sales, compared with Street estimates that call for an $89 million contribution, according to the report dated Tuesday and emailed toWednesday.Investors will be more interested in the initial full-year guidance, with Elf expected to provide a conservative outlook amid a challenging consumer backdrop, Grom said. The company has historically embedded some cushion in its initial expectations, according to UBS."We think investors are concerned as to whether the company can thread the needle and provide an outlook that appears more than achievable without causing concern on the top-line trajectory given tougher comps on the horizon," Grom said.Shares of Elf, which is scheduled to report results May 20, have lost 33% since its last earnings report, UBS said. The stock declined 3.8% in Wednesday trade."We would expect the print itself to be a volatile event, and given the wide range of outcomes on both the top- and bottom-line, we would remain on the sidelines until visibility improves," Grom said.Price: $53.75, Change: $-1.91, Percent Change: -3.43%

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