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The Dow Jones Industrial Average was down nearly 300 points at mid-session Wednesday, while the S&P 500 hovered near flat and the Nasdaq was positive. The market split tracked a familiar divide: strength in semiconductors and AI versus pressure in rate- and consumer-sensitive areas as inflation data kept borrowing costs elevated.
The Nasdaq Composite Index was relatively flat shortly after the open as investors digested the latest Producer Price Index (PPI) figures. The broader trend was described as up, with a trade through the minor swing top at 26,359.31 signaling a potential resumption of the uptrend.
Downside levels cited included 25,636.22, 25,425.57 and 25,279.16. If buyers fail to hold those areas, the next reference point mentioned was 24,577.57.
The sell-off was noted as the biggest since late March. Taking out the prior day’s low at 25,739.22 would be a further sign of weakness and could make 26,359.31 a new main top, the market’s first since March 17.
The new minor range was identified as 26,359.31 to 25,739.22, with a pivot at 26,049.26. The guidance was that sustained strength above 26,049.26 would be bullish, while sustained weakness would be bearish.
The S&P 500 edged higher on Wednesday and was positioned to challenge the record high at 7,428.97. A trade through 7,428.97 would reaffirm the uptrend.
On the downside, the prior day’s low at 7,338.54 was cited as a key level. If that level breaks, 7,428.97 would become a new main top, indicating increasing selling pressure. Initial downside targets were listed at 7,301.55, 7,268.42 and 7,237.76.
Because the main trend was described as up, buyers were expected to re-enter on pullbacks to those levels. The article also noted that failing to make a new high on rebounds or breaking below the cited pivots would signal weakness and a possible shift in momentum.
The Dow Jones Industrial Average was described as being in an uptrend. A trade through 50,130.20 would reaffirm the uptrend and put the record high at 50,512.79 on the radar.
The short-term range was given as 48,708.57 to 50,130.20, with the 50% level at 49,419.39 tested five days in a row. The article said sellers pierced that level on Tuesday down to 49,307.66, but the market recovered.
A sustained move under the pivot could accelerate declines toward the swing bottom at 48,708.57.
April’s Producer Price Index rose 1.4% for the month versus an expectation of 0.5%. On a yearly basis, wholesale inflation rose to 6%, the strongest annual reading since late 2022.
After the data, the 10-Year U.S. Treasury yield climbed near 4.49%, its highest level since July. The 30-year Treasury yield pushed above 5%.
The article linked this to the prior day’s April CPI print of 3.8% annually, noting that two consecutive inflation reports above expectations were not treated as a one-off by markets. It said the rate cut timeline was “thinner,” with financials, retailers and housing-related names feeling the impact immediately.
With the 10-Year moving to a multi-month high in a single session, the piece said investors were increasingly concerned that elevated rates could slow consumer spending and weigh on corporate profits before year-end.
The article argued that higher energy costs are feeding inflation through production expenses, transportation costs and consumer prices before they appear in CPI or PPI. It said businesses are still passing those costs along, making it harder for inflation to return to the Fed’s 2% target.
It also emphasized that every session with oil above $100 reduces the Fed’s room to maneuver, and said Wednesday was another such session.
Semiconductor stocks outperformed again Wednesday on renewed AI enthusiasm and optimism around Nvidia’s global business outlook. The article said reports that Nvidia CEO Jensen Huang would join Trump during his China visit sparked additional buying across chipmakers.
It cited Micron Technology jumping more than 5% and said the VanEck Semiconductor ETF advanced strongly. The broader point was that investors continued rotating into AI-related names even as the macro picture deteriorated for other parts of the market.
The article concluded that the key question was how long AI and semiconductors could carry the Nasdaq while other areas faced the combined weight of higher rates and higher energy costs.
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