WS #7340

The dominant signal in this window is the hot US PPI data, with April wholesale inflation surging 6% YoY (biggest since 2022) and monthly PPI rising 1.4% (well above 0.5% consensus). This reinforces the inflation narrative from yesterday's CPI report, solidifying expectations that the Fed may hike rates by year-end. Energy costs remain the primary driver, with gasoline surging 15.6% in April due to the Iran war. The PPI data pushed Treasury yields higher (10-year ~4.45%), but the Nasdaq was up as tech stocks rebounded from Tuesday's sell-off. Separately, the Trump-Xi summit in Beijing is underway, with Trump arriving in China and Xi hosting a welcome ceremony. The summit is the highest-signal geopolitical event, with potential implications for trade, chip restrictions, and Iran diplomacy. Bessent stated the US believes Iran is not paying soldiers or replenishing weapons stocks, a notable diplomatic signal. On the crypto front, the Senate Banking Committee advanced a crypto bill (Clarity Act), supporting the bullish crypto narrative. Charles Schwab began offering Bitcoin and Ethereum trading to US users, a major institutional adoption signal. Anduril raised $5B at $61B valuation, doubling its valuation and signaling continued defense tech boom. Alibaba shares jumped 7.5% after earnings as management struck a bullish tone on AI investments, disclosing AI revenue for the first time and signaling capex overshoot. Tencent missed revenue estimates but CEO Pony Ma signaled a turnaround. The Fed leadership transition continues with Miran's resignation timed to Warsh's swearing-in. The narrative arc is ESCALATING on inflation and Fed hawkishness, STABLE on the Xi-Trump summit, and BULLISH on crypto regulatory clarity.