Updates prices after U.S. market close

By Sinéad Carew and Elizabeth Howcroft

NEW YORK/PARIS, May 13 (Reuters) - MSCI's global equities gauge advanced with the dollar on Wednesday as investors assessed hotter-than- expected inflation data while they waited for a summit between U.S. President Donald Trump and China's Xi Jinping.

The Labor Department's Bureau of Labor Statistics said U.S. producer prices increased more than expected in April for their biggest gain since early 2022. This was the latest indication of an economic fallout from the U.S.-Israel war on Iran after Tuesday's U.S. inflation data showed consumer prices rose the most in three years, driven by an increase in energy-related costs.

"Given the concerns that already existed about the upside pressure on inflation this was one more data point to exacerbate those concerns," said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

"It's one of a couple of key narratives and it's probably the key worry for investors in the near term. You've got these conflicting forces, the concerns around inflation and what that will mean for Fed policy and rates," he added.

Countering inflation concerns was strength in the technology sector on Wall Street where the S&P 500 and the Nasdaq advanced on Wednesday with the biggest boosts from artificial intelligence-related technology shares.

"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."

Meanwhile, President Trump and an entourage that included Nvidia NVDA.O chief executive Jensen Huang and Elon Musk were greeted with a lavish welcome in Beijing on Wednesday as he prepared to ask China's Xi Jinping to "open up" to U.S. business at the start of their two-day summit.

While some investors have held out hope that the talks could lead to progress in the Middle East war, Trump said on Tuesday that he did not think he would need China's help to end the conflict.

"What we'll hear is a message that it was a productive meeting. The reality will probably be more limited in terms of tangible progress regarding the war and trade relations. I would be very measured in my expectations. You have to be," said Plante Moran's Baird.

The Dow Jones Industrial Average .DJI fell 67.36 points, or 0.14%, to 49,693.20, the S&P 500 .SPX rose 43.29 points, or 0.58%, to 7,444.25 and the Nasdaq Composite .IXIC rose 314.14 points, or 1.20%, to 26,402.34.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 6.01 points, or 0.54%, to 1,109.33. Earlier the pan-European STOXX 600 .STOXX index closed up 0.79%.

In bond markets, longer-dated yields reached the highest levels since mid-2025 before paring gains on Wednesday after producer prices rose more than economists had expected in April, then eased as traders evaluated the likely impact on Fed policy.

The yield on benchmark U.S. 10-year notes US10YT=RR was flat at 4.471%, from 4.471% late on Tuesday while the 30-year bond US30YT=RR yield rose 1.1 basis points to 5.04%.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.7 basis points to 3.979%.

In currencies, the dollar hit a two-week high following the latest hot U.S. inflation reading, while investors focused on the talks set to begin in Beijing between Trump and China's Xi.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro,
rose 0.16% to 98.49, with the euro EUR= down 0.22% at $1.1711.

Against the Japanese yen JPY=, the dollar strengthened 0.16% to 157.87, having briefly spiked Tuesday on "rate check" speculation, often seen as a precursor to intervention.

Sterling GBP= weakened 0.1% to $1.3523 as Prime Minister Keir Starmer's grip on power weakened.

Oil futures declined as investors worried about possible U.S. interest rate hikes due to rising inflation and awaited updates on the summit in Beijing.

U.S. crude CLc1 settled down 1.14% at $101.02 a barrel and Brent LCOc1 settled at $105.63 per barrel, down 1.99% on the day.

In precious metals, spot gold XAU= fell 0.5% to $4,689.91 an ounce. U.S. gold futures GCc1 rose 0.04% to $4,679.60 an ounce.