ORLANDO, Florida, May 13 (Reuters) - Investors shrugged

off a sharp rise in U.S. producer inflation and spike in bond

yields on Wednesday to push the S&P 500 and Nasdaq to new highs,

as they awaited the U.S.-China summit in Beijing between

Presidents Donald Trump and Xi Jinping.

In my column today, I look at how Trump's hand going into

the summit is weaker than it was the last time the two leaders

met in October, thanks to the Iran war and wave of inflation it

has unleashed.

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. US producer prices surprise with largest increase in

four years

2. G7 long bond stress intensifies: Mike Dolan

3. Warsh clinches Senate approval to be Fed's next chair

as inflation intensifies

4. To dot or not? Warsh's first Fed rate projection

could out his views to the public - and Trump

5. Roundhill fund becomes fastest-growing ETF ever as

retail investors seek semiconductor exposure

Today's Key Market Moves

* STOCKS: Solid gains in Asia - KOSPI +3%, Japan +1%.

Europe +1%, UK +0.5%. Nasdaq +1.2%, S&P 500 +0.6%.

* SECTORS/SHARES: Six sectors in the S&P 500 rise, five

fall. Tech +1%, comms services +2.7%, energy -0.9%. Ford +13%,

Micron Technology +5%.

* FX: Dollar rises again, Brazil real -2%, biggest fall

this year, on govt fuel subsidies.

* BONDS: U.S. yields end little changed. 30-year U.S.

auction is weak - high yield paid, very low bid/cover.

* COMMODITIES/METALS: Oil down, Brent -1.7%. Gold -0.5%.

Today's Talking Points

* PPIping hot

U.S. producer price inflation surged in April, notching the

biggest monthly and annual gains since 2022, and rising much

faster than analysts expected. If PPI is a precursor of CPI, the

signs are ominous - consumer inflation will soon be smashing

through the 4% barrier.

The difference between annual PPI and CPI inflation rates in

April jumped to 2.2 percentage points, the widest gap since

2022. The gap between the monthly measures was 0.8 percentage

point, matching the highest since 2010. Buckle up.

* Reaching the summit

The countdown to the Xi-Trump summit in Beijing is almost

over. The two leaders are expected to discuss Iran, Taiwan,

trade, energy and tech security, with expectations of major

breakthroughs on any of these issues being set pretty low.

Trump's entourage includes more than a dozen leading figures

from the business world, including Elon Musk, Apple CEO Tim Cook

and, at the last minute, Nvidia CEO Jensen Huang. Could this be

a sign of a potential agreement on Nvidia selling its powerful

H200 AI chips to customers in China?

* Confirmation

Kevin Warsh is chair of the Federal Reserve. He replaces

Jerome Powell, whose term ends on Friday but who will remain a

Fed governor. Fed Governor Stephen Miran, currently the central

bank's biggest advocate of rate cuts, will vacate his spot on

the board to make room for Warsh.

He has a job on his hands convincing his colleagues that

rates should be cut. Headline consumer and producer inflation is

the highest in years and rising, and some of the 'trimmed mean'

measures - favored by Warsh - are moving higher too.

What could move markets tomorrow?

* Developments in the Middle East

* Energy market moves

* U.S.-China summit in Beijing between Presidents Donald

Trump and Xi Jinping

* Japan earnings including Bridgestone, Honda and Rakuten

* Bank of Japan board member Kazuyuki Masu speaks

* Bank of England chief economist Huw Pill speaks

* UK trade (April)

* UK industrial production (March)

* UK GDP (Q1, prelim)

* U.S. weekly jobless claims

* U.S. retail sales (April)

* U.S. import prices (April)

* U.S. Federal Reserve officials scheduled to speak include

Kansas City Fed President Jeffrey Schmid, Cleveland Fed

President Beth Hammack, New York Fed President John Williams and

Governor Michael Barr

Want to receive Trading Day in your inbox every weekday

morning? Sign up for my newsletter here.

Opinions expressed are those of the author. They do not

reflect the views of Reuters News, which, under the Trust

Principles, is committed to integrity, independence, and freedom

from bias.