US PPI Jumps 6% as Trump Meets Xi in Beijing

US producer prices rose 6.0% year-over-year in April, the biggest annual increase in four years, the Labor Department reported. Producer prices increased 1.4% from March to April on a month-over-month basis.

The April PPI followed a 3.8% year-over-year consumer price reading earlier in May. Financial markets responded to the inflation data: the yield on the 10-year U.S. Treasury reached about 4.5% intraday, a level not seen in roughly ten months, and the U.S. dollar index climbed to about 98.45.

Market pricing shifted after the data. The CME FedWatch tool showed a reduced probability of Federal Reserve rate cuts in 2026 and higher odds of rate increases in the first half of 2027. The U.S. Senate confirmed Kevin Warsh to a 14-year term as a Federal Reserve governor.

Equity markets moved higher despite the inflation surprise. The S&P 500 rose about 0.6% and the Nasdaq 100 gained about 1%, with large-cap technology companies leading gains and reaching record levels.

President Donald Trump met Chinese President Xi Jinping in Beijing. The U.S. delegation included Nvidia CEO Jensen Huang. Officials discussed AI competition, semiconductor restrictions and regional security issues. Investors tracked the summit for possible shifts in trade, technology and geopolitical policy.

The U.S. Energy Information Administration revised its outlook to reflect a longer and more severe disruption to global oil supplies tied to Iran formalizing control over the Strait of Hormuz. Brent and West Texas Intermediate crude oil remained above $100 per barrel as markets priced a continued geopolitical premium into energy prices.

Alibaba reported an operating loss attributed to heavy investment in AI infrastructure. Its American Depositary Receipts initially fell about 3% on the results but later recovered and closed about 8% higher. In early Asia trading, the CSI 300 and China A50 each rose about 0.1% and the Hang Seng climbed roughly 1.1%. The onshore yuan traded near 6.7855 per dollar and the offshore yuan approached about 6.7740 per dollar.

Near-term U.S. data that could influence markets include April retail sales and initial jobless claims for the week ending May 9. The producer price index measures prices received by domestic producers and can precede changes in consumer inflation as producer costs feed into retail prices over time.