by Michael P. Reinking, CFA - Sr. Market Strategist

Published on 5/14/26 (a/o 2:00 pm)

DOW 50,103 (+343), S&P 500 7,504 (+103), Russell 2000 2,844 (+1), NYSE FANG+ 17,581 (+382), ICE Brent Crude $105.75/barrel (-$2.02), Gold $4,682/oz (-$5), Bitcoin ~81.9k (+1293)

The S&P 500 was up 0.6% yesterday though breadth was weak as the equal-weight dropped 0.4% and the Rusell 2000 was flat. Semis and tech hardware drove the action. While the market awaited news from the Trump-Xi meeting and scrolled through a lot of memes of Nvidia CEO Jensen Huang hanging on to Air Force One as a last-minute addition to the delegation, a hot PPI print was the primary focus of the day. Inflation upside stepped up from Tuesday’s somewhat hot CPI print. Despite that, treasury yields were rather tame and crude oil fell on the day. The clear winner yesterday was the Islander’s Matthew Schaefer, who took home the Calder Trophy as the NHL’s rookie of the year in a unanimous decision…at the age of 18.   

US equity futures traded higher overnight amidst the positive vibes coming out of China and blowout Cisco earnings, reinforcing a bid beneath the tech sector. Futures pulled back modestly from the highs after this morning’s economic data largely due to the third hot inflation print of the week, we’ll discuss more below. However, that pullback was very short lived and equities have continued to push higher throughout the day with the S&P 500 hitting another milestone trading up to 7,500, currently up just under 1%. The Dow Jones Industrial Average is also up ~1% pushing through 50k, trying to close above that level for the first time since February 11th. The breadth is much better today with adv:dec in the S&P 500 just under 3:1. 

It turns out that Jensen Huang wasn’t the only surprise attendee in China, at least for the MAC Desk. Our fearless leader, President of the NYSE Lynn Martin, was amongst the delegation of U.S. business and technology leaders participating in President Trump’s historic state visit with Chinese President Xi Jinping. The initial readouts of the Trump-Xi meeting have been positive. Both agreed that the Strait of Hormuz should remain a free waterway and that Iran should not have a nuclear weapon, according to the White House readout. President Trump said the US and China will have a “fantastic future” while Xi told the US CEOs attending that US companies will have “even broader prospects in Chinese market.” Trump also invited Xi to visit the White House in September. It wasn’t all smiles and backslaps though. The topic of Taiwan brought some tension into the room, and not wholly unexpected, as Xi warned the US must handle the situation with “extreme caution”. Another area of contention is the MATCH Act legislation making its way through Congress, which would set up a series of export controls on technology like semiconductors. The headlines continue to roll in throughout the day. 

Switching to this morning’s economic data….March Retail sales were inline with estimates (0.5%) but slowed from last month (1.6%). The control group came in a slightly higher than expected but also slowed. Auto vehicles fell 0.5%, home furnishings dropped 2.0% and clothing fell 1.5% Electronics and appliances rose 1.4%, food/beverage 0.8% and non-store (online) retailers 1.1%. Overall 9/13 categories posted increases and the report, while not robust, doesn’t provide much to change the overall narrative. Weekly jobless claims came in slightly higher than expected but remain historically low levels while continuing claims remained under 1.8ml. For the third consecutive day there was a hot inflation reading with both import/export prices coming in well ahead of estimates and doubling from last month up 1.9%/3.3% m/m after increasing 0.9%/1.5% in March. Treasury yields were modestly lower overnight pulling back from the uncomfortably high levels of last few days. Yields jumped 2-3bps after the print but have started to drift a bit lower again down 1-4bps across the curve. Yesterday just after the Mid-Day went out Kevin Warsh was confirmed by the Senate in the closest vote in the modern era (54-45) with only Dem. Senator John Fetternman breaking the party line. Chair Warsh will take the helm at a difficult time with inflationary pressures building and a President who clearly wants rates lower. 

The Senate has been busy. This afternoon the Senate Banking Committee advanced the Clarity Act Bill by a vote of 15 - 9 with two democrats crossing the aisle. This will now move to the Senate for a full vote. The crypto complex has been moving higher throughout the day. Bitcoin traded right up to its 200d ~82k before pulling back modestly.  

Moving from the macro to the micro. Technology is leading to the upside again today with Cisco trading up >10%. The company is the most recent to highlight the strong demand for data center and network upgrades to accommodate AI traffic growth and was also the most recent to announce a round of AI related layoffs (4k <5% of workforce). The results are pulling other tech hardware names higher. Software is bouncing after yesterday’s weakness with cyber hitting new highs. The white-hot memory/storage names are trading down modestly (DRAM ETF -1%). Semis are mixed with the high-performance silicon stocks outperforming with the Cerebras IPO in focus. Nvidia is pushing to new highs ahead of next week’s earnings. Apple is pulling back modestly amidst reports that its relationship with OpenAI is fraying and could lead to a legal fight. Consumer Discretionary is hovering around unchanged but the breadth within the group is positive with Ford extending yesterday’s gains. Casinos and restaurants are the laggards.  Consumer staples are outperforming with retailers, consumer products and food stocks all moving higher. Energy stocks are also up just under 1%. Within industrials trucking stocks are higher after FreightWaves highlighted spot rates jumping %0.41/mile to $3.5/mile over the last week.  Financials which have been an area of concern recently are bouncing with pretty broad-based participation crypto exposed stocks are leading to the upside. Materials is the worst performing sector with commodity prices moving lower. Packaging stocks are holding up. REITs and healthcare are both modestly lower. 

Oil prices were lower for much of the day but have turned slightly positive. The move higher in the USD is weighing on the metals complex. India also instituted  an import cap of 100kg/license after raising import tariffs on gold/silver to 15% from 6% earlier this week. Ag commodities are also under pressure falling ~3%. We discussed crypto earlier. Also, notable outside of the Clarity Act, Fidelity launched its first tokenized fund, the USD Digital Liquidity Fund (FILQ).  

European equities closed higher with the DAX in the lead. Banks are mostly higher, along with Tech hardware (Nokia +8%, Infineon +4%, Ericsson +3%) following Cisco’s earnings last night. Monthly UK GDP came in better than expected. The Nikkei closed down 1% overnight with Industrials seeing some selling. With President Trump and Xi meeting during the day the Hang Seng was flat and Shanghai fell 1.5%. Mainland China saw selling pressure across tech names. Alibaba rose ~4% on earnings, supporting the Hang Seng. Both it and Tencent said capex was going higher. The US approved Nvidia H200 chip sales to ten Chinese companies, including Alibaba, Tencent, JD.com, Lenovo, Foxconn and ByteDance, according to reports. 

Quickly looking ahead to tomorrow expect more readouts from the China Summit. US economic data includes Empire Manufacturing the first look at May data and industrial production. It is also options expiration which may have added to some of the recent upside momentum.

After-Market: AMAT, FIG, HUBG, NN, ROST, YSS

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