Nasdaq set for cautious open after record-breaking Thursday as inflation and geopolitics weigh

• Nasdaq 100 futures down 1.3%, S&P 500 futures off 0.9%, and Dow futures down 0.5% after Thursday's rally led by Cisco (up 13%) and Nvidia (up 4.4%)
• Monthly PPI surged 1.4% versus 0.4% forecast, pushing Fed rate hike probability to 45% and sharply reducing expectations for rate cuts in 2026
• Trump's Beijing visit yielded limited results on trade tensions, while warnings about military action in the Strait of Hormuz sent oil prices higher, adding inflationary pressure

Market Summary

Market Opening:

US stock futures point to a pullback on Friday, May 15, 2026, following Thursday's record-breaking session. Dow Jones futures down 0.5%, S&P 500 futures down 0.9%, and Nasdaq 100 futures off 1.3%. On Thursday, the Dow and S&P 500 climbed 0.8% each, while the Nasdaq gained 0.9%, closing at 26,635.

Key Movers:

Cisco surged over 13% after raising revenue and earnings guidance. Nvidia added 4.4% following US approval of H200 chip shipments to ten Chinese companies. The rally was driven by renewed enthusiasm for artificial intelligence stocks.

Geopolitical Developments:

President Trump's state visit to Beijing concluded with limited substantive achievements. While chip approval provided modest positive news, broader trade tensions remain unresolved. Trump's warning about potential military action in the Strait of Hormuz has pushed oil prices higher, exacerbating inflation concerns.

Inflation Concerns:

Both US consumer and producer price indices exceeded expectations significantly. Monthly PPI surged 1.4% versus a forecast of 0.4%. This has driven the probability of a Federal Reserve rate hike to approximately 45%, double the level from days earlier, while sharply reducing expectations for rate cuts in 2026.

Bond Markets:

US Treasury yields are rising alongside gilts and Japanese government bonds. G7 finance ministers will discuss the synchronized bond market selloff at their Paris meeting on Monday and Tuesday.

Market Implications:

Investors face a challenging environment with persistent inflation, geopolitical uncertainty, and shifting monetary policy expectations weighing on sentiment after Thursday's record highs.