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News of the day for May 14, 2026

Tech stocks powered the S&P 500 and Nasdaq to record closing highs yesterday.
Credit: Angela Weiss / AFP / Getty Images

Stock futures are higher Thursday, putting the S&P 500 and Nasdaq on track for more record highs; President Trump and Chinese President Xi Jinping are through their first private meeting, where they reportedly discussed trade, Iran and Taiwan; Cisco shares are soaring in premarket trading after the networking equipment maker reported better-than-expected results and announced layoff plans to invest in AI; the market's appetite for new AI stocks will be tested today as AI chipmaker Cerebras is set to make its trading debut; and shares of Doximity are plunging after the medical networking platform missed profit and outlook estimates. Here's what you need to know today.

Stocks Rise, Oil Flat as Markets Await News on Iran, China Talks

Futures are pointing to a higher open for major indexes as the stock market extends its rally. Futures tied to the Dow Jones Industrial Average were up 0.8% recently, while those linked to the S&P 500 and the tech-heavy Nasdaq added 0.3%. The S&P 500 and Nasdaq closed at record highs yesterday as tech stocks surged, while the Dow closed slightly lower. WTI crude oil futures, the U.S. benchmark, were down less than 1% at around $101 per barrel, as investors await updates on peace talks with Iran while President Trump and other administration officials are in China (more on that below). Gold futures were holding steady at $4,710 an ounce, while bitcoin traded at $79,300, down from a high of $81,300 on Wednesday. The yield on the 10-year Treasury note, which has been at its highest levels since last summer in recent days, fell to 4.44% this morning from 4.48% at yesterday's close.

Trump, Xi Discussed Iran, Trade and Taiwan in Closed-Door Meeting

President Donald Trump has finished his first closed-door meeting with Chinese President Xi Jinping. The two leaders reportedly discussed a range of topics, from tensions over Taiwan, which is a self-governing island that China claims is part of its territory, to the U.S. and China's shared belief that the Strait of Hormuz should be open with no one country controlling the key shipping passageway. Officials are also expected to further discuss trade, in an attempt to avoid a spiraling trade war after Trump imposed massive tariffs last year and China retaliated with import taxes of its own.

Cisco Stock Soars After Earnings, Layoff Announcement

Shares of Cisco (CSCO) are surging this morning after the networking hardware maker topped estimates in its latest quarterly results and announced a plan to cut jobs so it can spend more on its AI efforts. The former dot-com era favorite reported fiscal third-quarter revenue of $15.84 billion and adjusted earnings of $1.06 per share, each above the analyst consensus compiled by Visible Alpha. Cisco said in a press release late Wednesday that it will restructure to free up cash "to invest in key growth opportunities including silicon, optics, security and AI." The company said that the plan would lead to about $1 billion in one-time charges for severance and other costs, without providing an estimate for how many employees will be affected. Cisco shares were up 15% in recent premarket trading, poised to open well above yesterday's record close of nearly $102.

Investors Get a New AI Stock With Cerebras IPO Today

It's not OpenAI or Anthropic, but investors will get access to a new AI play today, as shares of Cerebras (CBRS) are expected to start trading. The AI chipmaker said last night that it would sell 30 million shares priced at $185 per share in its initial public offering, higher than its originally projected 28 million shares priced between $115 and $125 and above reports earlier this week that suggested the range could be lifted to $150 to $160. The final pricing puts Cerebras on track to generate $5.55 billion in proceeds from the IPO.

Doximity Stumbles After Earnings, Outlook Disappoint

Shares of Doximity (DOCS) are tumbling this morning after the medical professional networking platform's latest results. The company said it generated $145.4 million in revenue in its fiscal fourth quarter, roughly in line with estimates, while adjusted earnings of 26 cents per share fell short of Visible Alpha's analyst consensus. Doximity's revenue forecast for the first quarter and full fiscal year also came in below what analysts were expecting. Shares were down 23% ahead of the opening bell, on track to hit their lowest level since Doximity's June 2021 IPO.

Concerns about keeping or finding jobs spiked in 2025.
Credit: Spencer Platt / Getty Images

KEY TAKEAWAYS

• The U.S. Federal Reserve released its annual report on Americans' financial well-being Wednesday.
• While economic numbers showed growth, Americans' sentiment on the economy turned more negative in 2025.
• More Americans worried about finding or keeping a job in 2025 than the year before, the Fed found.

Americans' financial well-being held steady overall in 2025, but slipped for young adults, Black adults, and low-income households, the Federal Reserve said Wednesday.

The Fed's annual report on the economic well-being of U.S. households found that about one-fourth of adults rated the economy good or excellent in 2025, a small decline from 2024. However, it was a 24 percentage-point drop from 2019. Concerns about inflation were also down, even as many Americans were turning to credit cards and buy now pay later plans to make ends meet.

Young adults in particular struggled. Fifteen percent of adults under 30 said they were not working because they couldn't find a job, up from 13% in 2024 and three times the rate among adults 30 and older. About half of adults under 30 were living with a parent, up 12 percentage points since 2019.

Why This Matters

The annual Fed report on Americans' financial well-being is one of the most detailed looks at how American households are faring, covering income, savings, debt, housing, and work. The 2025 edition shows pressure building unevenly, with many losing ground even as the overall figures held stable.

The Fed's survey mirrored a split found in broader economic data for 2025. The economy expanded, though more slowly than in 2024. Inflation cooled, with the Consumer Price Index ending the year at 2.7%, down from 2.9% a year earlier. But hiring slowed: revised Bureau of Labor Statistics data released in February showed U.S. employers added 181,000 jobs over the year, the slowest pace outside a recession since 2003.

In the Fed survey, 42% of adults said finding or keeping a job was a major or minor concern, up 5 percentage points from 2024. In addition, a lower share of Americans left their jobs voluntarily, suggesting fewer people felt they could find a better job somewhere else.

While their economic outlook darkened, consumers reported being less worried about prices in 2025.

Price increases remained the most common financial concern overall. More than nine in 10 adults said price increases were a "major" or "minor" concern, unchanged from last year. But the share calling them a "major" concern fell 3 percentage points.

That dip in "major" concern was concentrated among higher-income adults, while lower-income Americans' worries held flat—66% of adults earning less than $50,000 called rising prices a major concern, compared with 42% of those earning $100,000 or more.

Higher-income households generally hold more in stocks and likely benefited most from the AI-driven stock market boom in 2025, leaving them better protected from price increases or a slowing job market.

Oil has stuck around $100 a barrel -- threatening to fuel a fresh inflation spike.
Credit: Patrick T. Fallon / AFP via Getty Images

KEY TAKEAWAYS

• Rising oil prices are driving up bond yields, making borrowing more expensive.
• The 10-year U.S. Treasury yield is nearing a critical 4.5% threshold, and developments in Iran could push it over the line.
• The Federal Reserve is expected to keep rates steady amid inflation risks tied to higher oil prices, which also influence bond traders' next moves.

Homebuyers and businesses hoping for cheaper loans may have to wait for oil prices to come down.

That’s because bond markets, where mortgage rates and other long-term borrowing costs are set, are trading in line with oil prices as they swing above or below $100 a barrel.

When investors are optimistic the Iran war is ending, oil prices and rates have been falling in tandem. The opposite happens when investors expect the war to drag on, which has driven the yield on the 10-year U.S. Treasury up to 4.47% Wednesday, up from below 4% before the war. The average 30-year mortgage rate has also shot up to 6.37%, up from below 6% in late February.

Bond investors’ big fear—that inflation eats away at their interest payments—is forcing them to demand higher interest rates on government bonds. 

What This Means For You

Higher oil prices are driving up borrowing costs, making mortgages and business loans more expensive for consumers and companies. This could delay home purchases and investment decisions.

It isn’t just the U.S. government that’s paying more to borrow. Bond yields are also up in Germany, the United Kingdom, Canada and Australia, according to Bob Elliott, CEO and chief investment officer at Unlimited Funds. 

“At this point, pretty much every bond market is trading in lockstep with the undulations in oil prices,” Elliott wrote this week.

Not that equity markets seem to mind. Oil shocks are “insidious,” he wrote, because they pressure household budgets all while making credit less available by raising interest rates. But stock markets seem to be ignoring those pressures, with the S&P 500 index at record highs.

“Given the global nature of the equity recovery, it seems like a big, very hopeful bet that this oil shock issue has limited economic impacts,” Elliott wrote, adding it’s “a bold call given the pain experienced by the bond market.”

The 4.5% Test

There are some critical thresholds at play for bond investors, who include pension funds, sovereign wealth funds, insurance companies and your average retiree. 

Thus far, the yield on the 10-year U.S. Treasury note has mostly stayed below 4.5%. That's a contrast to last April's tariff-driven market turmoil and 2023, when bond markets grappled with decades-high inflation.

If oil prices keep rising, that 4.5% level could be tested, wrote John Canavan, lead analyst at Oxford Economics. Since the 10-year yield is a key input into mortgage rates, that would make homebuying more expensive and refinancing less appealing. 

But bond yields could also fall again if there’s a credible path to reopen the Strait of Hormuz, a critical chokepoint in global oil markets, Canavan wrote. 

“The struggle for direction should continue as long as negotiations between the U.S. and Iran remain in limbo, with rates still tethered to the war’s path,” Canavan wrote.

At least on Wednesday, there was some hint of optimism in markets, wrote Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets. The 10-year yield touched 4.5%, but bond traders seemed willing to buy at that level and pushed rates back down, Lyngen wrote. U.S. oil benchmarks also remain “within the orbit” of $100 per barrel, he added.

That all “implies optimism that there is some type of resolution that results in oil flowing out of the region at some point in the coming weeks—otherwise energy prices would drift higher,” he wrote.

Fed Path

The outlook for the Fed also plays a key role.

Before the war, markets were optimistic that the Fed would cut rates a couple of times this year. But now traders see the Fed more likely to stay on hold, and some fear inflation will force the central bank to hike.

The Fed’s benchmark rate is short-term, but it can translate into higher long-term yields as traders price in a Fed that keeps rates higher or not as low for the next decade. 

With oil prices pushing up inflation again, the Fed will likely “keep rates unchanged for the foreseeable future,” Lyngen wrote.

The Fed “can’t cut here,” analysts at the Dutch bank ING agreed. For now, the 10-year yield may be able to stay below that 4.5% mark, since getting paid that level of interest makes it a “structural buy for many players.”

“That said, it can just as easily sail on higher, especially as there is no easing in price pressures to help calm things down,” they wrote.

Others still see Fed rate cuts coming later in the year. While the consumer price index rose by 3.8% in April, analysts at UBS expect inflation to moderate to 3.3% by year-end, paving the way for Fed cuts to continue.

While markets are focused on inflation risks, the UBS analysts pointed to the chance that higher oil prices will depress economic activity—boosting the case for Fed cuts so that unemployment doesn’t rise.

“We believe the market still underestimates the downside risks to growth,” they wrote. “Persistently higher oil prices may mechanically push inflation expectations higher in the near term, but over time they are likely to weigh on economic activity.”

The Magnificent Seven stocks have risen more than 25% since late March.
Credit: Michael Nagle / Bloomberg via Getty Images

Key Takeaways

• Morgan Stanley analysts on Wednesday maintained their endorsement of hyperscaler stocks, which they argue offer investors exceptional earnings growth at "undemanding" prices.
• The analysts expect investors will continue to focus on the tech giants' revenue growth, which accelerated across the board last quarter, rather than their ballooning AI budgets.

The tech stock rally may have taken a breather this week, but analysts expect that break means Big Tech has more room to run. 

Morgan Stanley analysts on Wednesday named the hyperscalers—Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta (META)—among their preferred stock plays, citing the group’s “strong forward earnings at undemanding valuation levels.”

The firm first made the case for the hyperscalers as value plays in early April, around the same time as Goldman Sachs. Soaring oil prices and rising risk aversion caused the Magnificent Seven—the hyperscalers plus Nvidia (NVDA), Apple (AAPL), and Tesla (TSLA)—to pull back nearly 10% in the first month of the war in Iran. Analysts simultaneously increased their earnings growth forecasts, causing the group’s stock valuations to slide to their lowest levels since Liberation Day. By early April, the Mag 7 was only marginally more expensive than the Consumer Staples sector even though its profits were expected to grow three times faster, according to Morgan Stanley.

Why This Matters To Investors

The Magnificent Seven came to be in 2023 when the tech giants' growth began accelerating and their stocks left of the rest of the market in the dust. They remain America's most influential stocks, accounting for more than one-third of the S&P 500.

Earnings reports from the hyperscalers last month confirmed what analysts suspected: Business is booming. Cloud growth accelerated to multi-year highs at Alphabet, Microsoft, and Amazon. Meta reported its fastest revenue growth since 2021. 

Strong results have helped keep the hyperscalers’ valuations “undemanding” despite big run-ups in their share prices, according to Morgan Stanley. The Roundhill Magnificent Seven ETF (MAGS), a measure of the performance of the group broadly, is up 27% since late March. Yet the Mag 7 trades at just a 30% premium to the S&P 500 on a forward price-to-earnings basis, down from more than 70% in 2023 and and a low level historically.

Still, the recent run-up in tech stocks and the hyperscalers’ ballooning infrastructure budgets have revived fears that an AI bubble is forming. The hyperscalers are expected to boost their infrastructure spending by 60% this year, to more than $700 billion. That increase is expected to pressure their already dwindling free cash flows, and some investors worry they’ll struggle to recoup those investments.

Such concerns have arisen repeatedly over the years, but have yet to derail the AI rally. According to Morgan Stanley, investors are unlikely to punish the hyperscalers for their AI spending in the near-term. The tech giants haven’t borrowed much to build their data centers, and thus face minimal risk that higher interest rates will drive up costs. Plus, their cloud computing services are in high demand. As long as these conditions persist, Morgan Stanley expects investors to focus more on revenue growth than capital expenditures or free cash flows. 

And Morgan Stanley sees strong revenue growth ahead. “Our proprietary analysis shows that momentum continues to build around AI adoption,” the analysts wrote. The more businesses and consumers experiment with AI and develop new use cases, the greater the revenue tailwinds for the hyperscalers whose platforms host the technology. 

Walmart shares are up about 19% this year.
Credit: Brandon Bell / Getty Images

Key Takeaways

• Walmart, the biggest U.S. private employer, is cutting about 1,000 professional jobs.
• The company says the cuts are related to organizational structure, rather than AI-drive efficiency.

Walmart is cutting jobs—but it isn't blaming AI.

The giant retailer, at about 1.6 million domestic employees the largest private employer in the U.S., will cut or relocate some 1,000 corporate jobs, according to a source familiar with the matter. News of the changes was first reported by The Wall Street Journal.

"We’ve made changes to simplify how the work is organized, make ownership clearer, and better align roles to the work and skills we need going forward," read a Tuesday memo to employees from two Walmart (WMT) technology, product and design executives, which was viewed by Investopedia. "These changes also involve difficult decisions. Some work has been consolidated, and some roles have been eliminated."

A spokesperson said Walmart's plans are related to organizational structure and not because it intends to have AI handle more tasks. They come as big companies, including big tech employers like Meta Platform (META) and Microsoft (MSFT), are cutting thousands of jobs as they continue to spend tens of billions on AI.

More broadly, the spread of AI forcing workers to reconsider their career plans and pathways as some fields—including many professional roles—come other pressure and others emerge. Many companies are in particular targeting reductions in their professional workforces.

"Ultimately, we're designing a team that's set up to move faster, scale what works and deliver better experiences for customers and members everywhere," the memo said. "Today is an important step in continuing to evolve how we build and operate for the future."

More than two-thirds of Walmart's workers are full-time, according to the company's latest annual report.

Shares of Walmart were recently edging higher as broader markets rose.

The Senate on Wednesday voted to confirm the nomination of Kevin Warsh to replace Jerome Powell as chair of the Federal Reserve.
Credit: Graeme Sloan / Bloomberg / Getty Images

KEY TAKEAWAYS

• The Federal Reserve's latest policy meeting had the most dissents since 1992, signaling internal division.
• Departing Governor Stephen Miran has dissented at every meeting since joining the Fed in September.
• Incoming Fed Chair Kevin Warsh said he wants more debate, potentially ending the Fed's consensus norm.

The Federal Reserve's incoming chair has said he wants more debate at Fed policy meetings. If recent voting records are any indication, Kevin Warsh will get exactly that when he takes over.

The Federal Open Market Committee (FOMC) late last month voted to hold the benchmark interest rate at 3.5% to 3.75%, where it has been all year. However, three regional Fed presidents opposed language in the post-meeting statement that suggested the next move would likely be a cut. Governor Stephen Miran, who is about to leave his position, cast the only vote for an immediate rate cut, the sixth straight meeting at which he dissented since joining the board in September. The four dissents represented the most at a single meeting since 1992.

The unusually high level of dissent could signal an even more contentious period ahead for Fed decisions on interest rates. Warsh, who on Wednesday received Senate approval to take over as Fed Chair when Jerome Powell's term expires on Friday, said at an April confirmation hearing that he's no fan of the Fed's long-standing preference for consensus.

"I tend to favor messier meetings than some, where people don't show up with rehearsed scripts," Warsh said. "We can have a good family fight."

Why This Is Significant

Under Jerome Powell's leadership over the past eight years, decision-making at the Fed has been consensus-driven. Incoming head Kevin Warsh has indicated he favors more disagreement in Fed policy meetings, while also advocating for changes in the way the Fed analyzes economic data and how much guidance the central bank provides about possible future decisions.

Why the Fed Has Aimed at Consensus

Public consensus has been an FOMC goal for several decades. Dissents were common in the inflation-fighting years of the 1970s and early 1980s, but they grew rarer under Alan Greenspan, whose proposals were typically approved unmodified after committee discussion. While internal clashes didn't go away, public votes confirming them often did. That norm has held through chairs Ben Bernanke, Janet Yellen, and now Powell.

"Every new Fed chair has the same situation, which is you've got 18 colleagues on the ​FOMC, 11 [others] vote during a year, and your job is to create consensus," Powell said at his final press conference as Fed chair after last week's meeting.

The rationale is as much strategic as institutional. A unified vote sends a clearer signal to markets about the Fed's intentions and helps better set public expectations about inflation and future economic growth. It can also make the central bank a harder target for political pressure on individual board members when disagreements are kept inside the room.

Discarding the consensus norm carries trade-offs: a 2025 study found that even "hidden dissents"—where FOMC members left misgivings in meeting transcripts but voted with the majority anyway—create more volatility in the stock and bond markets around Fed decisions as traders try to read coalitions instead of a single committee voice.

The 'Family Fight' Ahead

Miran's record—of registering dissents at every FOMC meeting he attended—reflects the strain on the central bank since Trump's inauguration in 2025. The president has pressured the Fed to cut interest rates and has taken unprecedented steps to install appointees who share his preference for lower rates at the Fed. He appointed Miran, then an economic adviser to the White House, to serve out the term of another Fed governor, Adriana Kugler, who resigned.

In public appearances, Miran has consistently promoted Trump's economic policies while arguing for rate cuts. For instance, in a January speech, he said the Fed had room to cut interest rates without stoking inflation because the administration's deregulation efforts would increase the economy's productive capacity. At every FOMC meeting he attended, Miran pushed for a larger rate cut than his colleagues, or for a cut when others wanted to hold rates steady.  (Miran didn't answer an emailed request for comment.)

Other Fed officials have been more cautious, warning that cutting rates too much could worsen inflation, which has been stuck well above the Fed's 2% annual target since the pandemic. Consumer prices rose 3.8% in the 12 months through April, the highest rate in nearly three years, as soaring fuel prices stemming from the Iran war sparked inflationary pressure.

Trump's pressure campaign has thus far shown its limits. Powell plans to stay on as a Fed governor, denying Trump another seat to fill on the board. That's why Miran is expected to step aside this month, leaving an open seat for Warsh to fill.

Soon, Miran's streak of dissents may read less like an outlier than a preview of a more contentious period ahead.

Warsh seems to welcome that. "If the central bank has that good family fight, I think they're going to make better decisions," he told lawmakers last month. "If they happen to make mistakes, they'll correct them sooner."

Credit: Chen Mengtong / China News Service / VCG via Getty Images

Key Takeaways

• The Senate voted to confirm Kevin Warsh as the new chair of the Federal Reserve Wednesday, clearing the way for him to take the helm of the central bank.
• Warsh takes over as the nation's top inflation fighter at a time when the Iran war is steeply pushing up prices.

Regime change is on the way for the Federal Reserve, starting this Friday.

The Senate voted to confirm Kevin Warsh as the new chair of the Federal Reserve Wednesday afternoon, setting the stage for President Donald Trump's nominee to replace Jerome Powell as leader of the central bank on Friday when the current chair's term expires. The vote was mostly along party lines, 54-45. Warsh's term as Fed chair will run at least through 2030, and as a Fed governor through 2040.

What This Means For The Economy

Warsh's leadership of the Fed will immediately be put to the test, as the central bank faces political challenges to its independence and economic risks on both sides of its dual mandate from Congress to keep inflation low and employment high.

The vote clears the way for Warsh to begin a new era at the Fed, and likely some changes to the way it makes monetary policy. At a contentious confirmation hearing last month, Warsh said he wanted to bring "regime change" to the bank, reduce the Fed's public forward guidance on interest rate changes, shrink its holdings, and narrow its scope of activities.

Warsh will become one of the most important leaders shaping the trajectory of the U.S. economy, since the Fed is responsible for using monetary policy to ensure inflation is low and employment is high. It's a challenging task at the moment with the Iran war pushing up inflation, and uncertainty about the economy dragging down the job market.

He will also inherit a conflict between the Fed and the White House over the central bank's independence. Trump relentlessly pressured Powell to sharply lower interest rates, and has made it clear he expects Warsh to make cuts.

That conflict has made the leadership transition unusually rocky. The Trump administration's pressure on the Fed included a Justice Department probe of Powell over renovations at the Fed's headquarters, and an attempt to fire Fed Governor Lisa Cook.

Both of those actions have been thwarted at least temporarily. Powell has denounced those actions as intimidation tactics and has said he will take the unusual step of remaining on the Fed's board of governors after his chairmanship ends.

The first meeting of the Fed's policy committee under Warsh is June 16 and 17. Officials must decide whether to cut the central bank's key interest rate to boost the job market, leave it steady to wait and see how the Iran war affects the economy, or signal that interest rate hikes to combat inflation are in the cards.

The Fed's decision-making has been far from harmonious lately, with a growing faction of Federal Open Market Committee members becoming increasingly vocal about the need to keep rates higher for longer, or even raise them, contrary to Trump's desire for lower rates.

Movement of a key crypto bill Clarity Act could boost Circle's stock, according to analysts.
Credit: Michael Nagle / Bloomberg via Getty Images

Key Takeaways

• Movement in the Clarity Act, with the Senate setting its markup of the draft legislation for Thursday, bodes well for the company, according to Circle's execs and analysts.
• Shares of Circle have risen almost 50% since its June IPO, outpacing bitcoin and big crypto-linked stocks.

Crypto stocks have had a tough run lately. But not all of them.

Circle Internet Group (CRCL), the stablecoin issuer behind USDC, has risen almost 50% since its June IPO, outperforming the S&P 500, bitcoin and other big crypto stocks—including exchanges like Coinbase (COIN) and bitcoin treasuries like Strategy (MSTR), which are down roughly 20% and 50%, respectively, over the same period. (Bitcoin for its part, has recently slipped a bit to below $79,000.)

Shares of Circle haven't been immune to investors' crypto wariness. They remain well shy of the levels seen after their white-hot mid-2025 IPO. But they've more than doubled off February lows as investors have applauded indications that adoption of its dollar-pegged USDC is rising. Its performance could be seen as a sign that investors consider it more than a proxy for coin markets—and that they see reason for bullishness in certain pockets of crypto.

WHY THIS MATTERS TO INVESTORS

The Clarity Act is important to the crypto industry in that backers think an established regulatory framework will usher in greater adoption of its products and services. However, the passage of the bill doesn't guarantee a wave of institutional adoption.

Circle earlier this week reported strong first-quarter results, with its earnings-per-share beating analyst expectations, though revenue missed slightly. At the end of March, the company had $77 billion of USDC in circulation, up 28% year-over-year. Meta Platforms (META) recently started using the stablecoin to pay creators, while DoorDash (DASH) picked it up for its drivers.

Long awaited movement in the Clarity Act, a crypto bill that sets a framework for regulating digital assets and stablecoin rewards, presents the possibility of more upside in Circle's stock, according to analysts. The Senate banking committee released an over 300-page draft ahead of a scheduled markup and vote on Thursday.

Though Circle's core business hung in the balance of stablecoin reward negotiations—banks were concerned that the yield-bearing products would present a risk to deposit accounts—a compromise that allows certain activity-based rewards for loyalty programs could make USDC more attractive.

Circle also this week said it would soon launch a blockchain project called Arc, raising more than $200 million with a presale of associated tokens by the same name; language in the Senate banking committee's draft allows network tokens and prevents the SEC from deeming those types of digital assets a security.

"If Congress does act, the legislation will be helpful to us," Circle President Health Tarbert said on Monday's earnings call, per transcripts provided by AlphaSense.

Some analysts appear to agree. "The upcoming Senate Finance Committee meeting and Clarity Act markup could represent meaningful tailwind" for Circle, Citi's Peter Christiansen wrote Tuesday, saying progress in the bill is a "prerequisite for deeper institutional adoption" of the company's products and services.

Christiansen has a buy rating on the stock and a price target of $243. Of the nine analysts tracked by Visible Alpha, four have a buy rating, four are a hold (effectively a neutral stance), and one sell; the consensus price target on Circle is $129, implying upside of around 5%.

Polymarket traders put odds of Clarity passage this year at more than 60%, rising from the less than coin-flip probability it was at the end of last month. Since then, as the bill started moving, Circle's stock rose more than 35%, compared to the 10% to 15% gains in shares of crypto exchanges such as Coinbase, Bullish (BLSH), and Gemini (GEMI).

The bill could still face some opposition in the Senate. Sen. Elizabeth Warren, a ranking member of the banking committee, on Tuesday criticized the absence of an ethics provision.

Nvidia CEO Jensen Huang (right) is among the tech CEOs joining President Trump at a summit in China
Credit: Andrew Harnik / Getty Images

Key Takeaways

• Semiconductor stocks climbed Wednesday as Nvidia CEO Jensen Huang joined other tech CEOs attending a summit in China with President Trump.
• The CEOs of Qualcomm and Micron are also among the group of more than a dozen CEOs at the two-day summit.

Several semiconductor stocks are on the rise as several industry CEOs join President Trump on his China trip.

Shares of Nvidia (NVDA) were up about 2% in recent trading after closing at a fresh high Tuesday. Qualcomm (QCOM) also climbed about 2%, and Micron (MU) added close to 5%, with the PHLX Semiconductor Sector (SOX) up nearly 3%.

Nvidia CEO Jensen Huang, Qualcomm CEO Cristiano Amon, and Micron CEO Sanjay Mehrotra are all among the more than a dozen high-profile executives joining Trump on his trip to China for a two-day meeting with Chinese President Xi Jinping. Also attending are Tesla (TSLA) CEO Elon Musk, outgoing Apple (AAPL) CEO Tim Cook, and Boeing (BA) CEO Kelly Ortberg.

Why This Matters to Investors

Wednesday's gains suggest investors are bullish the trip to China could benefit the chipmakers, after some like Nvidia have been hampered by export restrictions limiting their sales to the country.

Trump said ahead of the trip that he will be asking to "open up" China, with Xi and Trump expected to discuss a range of topics, including trade and AI, that could impact the chipmakers' businesses.

Tech stocks have rallied lately amid renewed enthusiasm around the AI trade, and chip stocks have especially benefited, with several reaching new all-time highs in recent weeks.

With Wednesday's gains, Nvidia shares are up about 20% since the start of the year, while Qualcomm has rallied 25% and Micron shares have nearly tripled in value.

The war in Iran and the blockage of the Strait of Hormuz have dramatically raised the price of fertilizer and the cost of diesel fuel used in farming.
Credit: Jim West / UCG / Universal Images Group via Getty Images

Key Takeaways

• The unexpectedly high increase in the Producer Price Index in April signals inflation is heating up.
• Prices rose steeply for all kinds of products, not just fuel.
• Businesses are likely to pass along soaring wholesale costs to consumers as fuel price hikes spill over.

The Iran war is driving up wholesale costs for businesses, and consumers are likely to foot the bill sooner or later.

The Producer Price Index for final demand, a measure of wholesale prices, rose 1.4% in April alone and 6% over the last 12 months, the Bureau of Labor Statistics said Wednesday. That was the biggest monthly increase since March 2022 and the largest annual increase since December 2022.

The monthly increase was nearly triple the 0.5% rise that forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. Excluding the volatile prices for food, energy, and trade services, wholesale inflation rose 0.6% over the month, double the expected increase.

What This Means For The Economy

The jump in wholesale prices signals consumer inflation is building, and the Federal Reserve will likely be reluctant to cut interest rates anytime soon.

The echoes of 2022 are ominous because wholesale prices are a leading indicator of consumer inflation. The last time the PPI jumped this much, consumer inflation spiked to its highest in a generation.

Economists don't yet expect inflation to surge back to double digits, but consumers should brace for accelerating price increases. And the uptick adds to recent evidence that the war-related fuel price hikes are sending an inflation shockwave through the economy, pushing up prices for all kinds of other items.

"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," Sal Guatieri, senior economist at BMO Capital Markets, wrote in a commentary.

The widespread nature of the price increases highlighted that the supply chain disruptions from the conflict in the Middle East go far beyond oil. The Strait of Hormuz between Iran and Oman has been closed to ship traffic since the war began, cutting off a crucial trade route that carries 20% of the world's oil supply as well as fertilizer, aluminum, and other resources.

"Not only oil, but metals commodities, fertilizers and plastics are all directly impacted—or compounded by—the military conflict in Iran, promising higher inflation for producer costs for the foreseeable future," Kurt Rankin, senior economist at PNC, wrote in a commentary.

The latest supply chain disruption is likely to translate into higher consumer prices, similar to when COVID-19 shutdowns rippled through the global economy. Based on the wholesale price hikes, forecasters at Nationwide expect the Consumer Price Index to rise 4% over the year in May, up from a 3.8% jump in April, which would be a fresh high since 2023.