Mega-Cap Tech Powers Market to New Highs Despite Hot Inflation Data

Stocks overcame another hotter-than-expected inflation report on Thursday as renewed strength in mega-cap and AI-driven technology names pushed the market back into record territory. While broader participation remained mixed, powerful gains across the market’s largest companies lifted the S&P 500 and Nasdaq Composite to fresh all-time highs.

The S&P 500 gained 0.6%, while the tech-heavy Nasdaq Composite advanced 1.2%. In contrast, the Dow Jones Industrial Average slipped 0.1% as higher Treasury yields and weakness in rate-sensitive sectors weighed on the broader market.

Markets initially opened lower following the release of April’s Producer Price Index report, which came in significantly hotter than expected. Headline PPI rose 1.4% versus expectations of 0.4%, while core PPI climbed 1.0% against forecasts for 0.3%. On a year-over-year basis, headline producer inflation accelerated to 6.0%, while core PPI increased to 5.2%, reinforcing concerns that the Federal Reserve may need to keep interest rates elevated for longer.

Treasury yields moved higher in response, pressuring rate-sensitive corners of the market. However, investors quickly returned to buying yesterday’s weakness in technology and semiconductor stocks, fueling another strong rebound in growth names.

The PHLX Semiconductor Index surged 2.6% after Tuesday’s pullback, with chipmakers once again taking leadership of the broader rally. onsemi was among the best-performing names in the S&P 500, while NVIDIA extended its leadership role after reports that CEO Jensen Huang will accompany Donald Trump during his trip to China.

Elsewhere in tech, Apple climbed to fresh record highs, helping the information technology sector finish 1.0% higher despite relative weakness in software stocks.

Mega-cap strength also spread into other growth-oriented sectors. Alphabet and Meta Platforms powered the communication services sector to a market-leading 2.7% gain, while advances in Amazon and Tesla helped the consumer discretionary sector finish firmly higher despite broader weakness among its components.

The Vanguard Mega Cap Growth ETF rose 1.0%, highlighting how concentrated leadership among the market’s largest stocks continues to drive index-level performance. That dynamic was reflected in the sharp divergence between the market-weighted S&P 500, which gained 0.6%, and the equal-weighted version of the index, which declined 0.4%.

Outside of technology, Ford Motor Company delivered one of the day’s biggest gains after positive analyst commentary from Morgan Stanley surrounding the automaker’s emerging energy storage business.

Defensive areas of the market also saw selective strength, with the health care sector extending Wednesday’s rebound. Meanwhile, rising yields pressured rate-sensitive groups such as the utilities sector and real estate sector, while the financials sector lagged amid broad weakness in financial services names.

Geopolitical developments remained relatively subdued, though investors continued monitoring discussions tied to President Trump’s visit to Beijing, where talks with Xi Jinping are expected to include tariffs, Taiwan, and the ongoing Iran conflict.

Oil prices moved modestly lower, with crude futures settling near $101 per barrel.

Overall, the session reinforced the market’s current pattern: even in the face of stubborn inflation and rising yields, relentless leadership from mega-cap and AI-linked technology stocks continues to overshadow narrow participation and keep the broader uptrend firmly intact.

Our FTinvest 11 model portfolio declined 0.83% to close at 1,006.75, continuing the recent pullback from the all-time high of 1,041.22 reached earlier this month. The portfolio has now given back a portion of its recent gains, with short-term momentum remaining under pressure amid broader market volatility.

FTinvest 11 still remains up approximately +8.46% year-to-date, continuing to outperform despite the recent correction. While the current consolidation phase has weighed on performance in recent sessions, the portfolio’s disciplined, value-driven strategy remains focused on long-term capital growth and resilience through changing market conditions.