(Adds closing prices, details on Ford Motor ( F ) shares, other market

details )

* Indexes: Dow down 0.14%, S&P 500 up 0.58%, Nasdaq up

1.20%

* U.S. producer prices in April post biggest gain in four

years

* Morgan Stanley raises annual S&P target on earnings

strength Ford shares post biggest one-day percentage jump in

six years

* Utilities, financials lead sector losses

By Stephen Culp and Ragini Mathur

NEW YORK, May 13 (Reuters) - The S&P 500 and the Nasdaq

gained ground on Wednesday with a boost from artificial

intelligence-related tech shares, which helped markets look past

hotter-than-expected inflation data and the growing probability

that the Federal Reserve will hold to its restrictive monetary

policy for the foreseeable future.

The S&P 500 and the Nasdaq reversed earlier declines to

notch fresh record closing highs, as chip stocks

rebounded from Tuesday's decline.

Six of the Magnificent Seven group of AI-related megacaps

gained between 1.4% and 3.9%.

"In the face of continued hot inflation data, technology

remains resilient," said Ryan Detrick, chief market strategist

at Carson Group in Omaha, Nebraska. "And after some weakness

yesterday, the chip stocks came soaring back today."

A report from the Labor Department showed producer prices jumped

by 1.4% last month, the largest monthly increase in four years.

While the surge was largely driven by crude supply disruption

due to the closure of the Strait of Hormuz, the report showed

soaring oil prices are beginning to seep into other segments of

the economy, and suggested that rising inflation is becoming

pervasive.

Recent inflation data is dousing any remaining hopes for a

near-term rate cut from the Federal Reserve. In fact, Boston Fed

President Susan Collins said on Wednesday that a rate hike could

be in the cards if inflation pressures fail to subside.

Kevin Warsh, President Donald Trump's nominee to succeed Fed

Chair Jerome Powell, was confirmed by the Senate in a vote along

party lines.

"I would just be careful to not overlook the risk of a more

prolonged period of inflation and elevated interest rates," said

Jim Baird, chief investment officer at Plante Moran Financial

Advisors in Southfield, Michigan. He added that the PPI report

"reinforces the inflation risk narrative and at least makes the

case for a longer pause at the Fed."

TRUMP, MUSK, HUANG AND XI

Trump arrived in Beijing, along with an entourage that included

Nvidia ( NVDA ) Chief Executive Officer Jensen Huang and Elon

Musk, ahead of a two-day summit with his Chinese counterpart Xi

Jinping. Topics on the agenda include urging Xi to "open up" to

U.S. businesses and maintaining a fragile trade truce. Trump

will also seek to bolster his approval rating, which has been

battered by the Iran war and resulting surge in energy prices.

Nvidia ( NVDA ) and Tesla shares advanced 2.3% and 2.7%, respectively.

The meeting occurs amid China's warnings regarding U.S. arms

sales to Taiwan and criticism over proposed legislation that

would make it harder for Chinese chipmakers to produce AI

semiconductors.

"President Trump took almost a small army with him to meet

with the Chinese leaders and President Xi," Detrick said. "With

all the negative news about Iran, he wants to walk away from

this meeting in China with potentially some significant deals."

The Dow Jones Industrial Average fell 67.36 points,

or 0.14%, to 49,693.20, the S&P 500 gained 43.29 points,

or 0.58%, to 7,444.25 and the Nasdaq Composite gained

314.14 points, or 1.20%, to 26,402.34.

Among the 11 major sectors of the S&P 500, communication

services and tech enjoyed the largest

percentage gains, while utilities were the biggest

laggards.

Morgan Stanley raised its annual target for the S&P 500

index to 8,000 from 7,800, saying U.S. stocks have enough room

to rally as companies continue to post strong earnings.

Ford surged 13.2%, its biggest one-day percentage jump

in six years, after Morgan Stanley called the automaker's energy

business and its partnership with Chinese battery giant CATL

an "underappreciated" competitive advantage.

Nebius Group ( NBIS ) jumped 15.7% after the AI cloud firm

reported a nearly eightfold rise in quarterly revenue.

EchoStar ( SATS ) climbed 3.0% the day after the Federal

Communications Commission's approval of the $40 billion sale of

wireless spectrum to SpaceX and AT&T ( T ).

Cryptocurrency firms Coinbase and Strategy

slid 2.8% and 3.5%, respectively, dragged down by weakness in

bitcoin and ethereum.

Declining issues outnumbered advancers by a 1.21-to-1 ratio

on the NYSE. There were 433 new highs and 175 new lows on the

NYSE.

On the Nasdaq, 2,273 stocks rose and 2,450 fell as declining

issues outnumbered advancers by a 1.08-to-1 ratio.

The S&P 500 posted 37 new 52-week highs and 46 new lows

while the Nasdaq Composite recorded 119 new highs and 191 new

lows.

Volume on U.S. exchanges was 19.03 billion shares, compared

with the 18.12 billion average for the full session over the

last 20 trading days.