This is CNBC’s live blog covering the Asia Pacific markets.

Most Asia-Pacific markets rose on Wednesday, tracking Wall Street’s overnight gains that saw the Nasdaq Composite hit a new record closing high despite strong inflation data.

The Producer Price Index reading for April came in at 0.5%, higher than the 0.3% expected by economists surveyed by Dow Jones. Initial market reaction was negative but shares later rose as March wholesale prices were revised down to show a 0.1% decline.

Markets in South Korea and Hong Kong were closed on Wednesday for a public holiday.

Investors also weighed Australia’s annual budget released late Tuesday.

The People’s Bank of China kept its one-year medium-term lending rate unchanged at 2.5%. The CSI 300 index in mainland China fell by 0.45%.

In Australia, the S&P/ASX 200 index opened 0.44% higher.

Japan’s Nikkei 225 rose 0.75%, while the broader Topix added 0.53%.

Overnight on Wall Street, stocks ended Tuesday higher as investors awaited the headline inflation report.

The Nasdaq Composite rose 0.75% to close at a record high of 16,511.18.

The Dow Jones Industrial Average added 126.60 points, or 0.32%, while the S&P 500 added 0.48%.

— CNBC’s Lisa Kailay Hahn and Brian Evans contributed to this report.

Australia announced its annual budget, aiming to reduce the cost of living

The Australian government announced its annual budget late on Tuesday, with measures aimed at easing the cost of living, building more homes, and strengthening the healthcare system, among other things.

“This budget strikes the right balance between keeping pressures off inflation, providing cost-of-living relief, supporting sustainable economic growth and strengthening public finances,” Australian Treasurer Jim Chalmers said in a joint statement with Australian Prime Minister Anthony Albanese.

Chalmers said the government expects to achieve a second surplus in 2023-24, “which will be the first time the government has achieved back-to-back surpluses in nearly two decades.”

– Shreyashi Sanyal

CNBC Pro: These are Goldman Sachs’ favorite stocks with an upside of 50% or more

The stock was on a tear.

The S&P 500 has risen to record highs this year, and the Dow Jones Industrial Average had its best week of the year — and its eighth straight session last Friday.

But Goldman Sachs still gave some of its favorite stocks more than 50% upside potential, and one stock more than 100%.

CNBC Pro subscribers can read more about it here.

-Weezin Tan

CNBC Pro: Are memes making a comeback? These four stocks could benefit from the retail investor boom

Whether or not retail investors cash in on their bets on GameStop and AMC Entertainment, one group of companies is set to benefit from a surge in trading.

These four companies have previously admitted to boosting profits from higher retail investor trading.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Inflation remains too high to justify interest rate cuts this year, according to one strategist

The Federal Reserve is unlikely to cut interest rates this year, according to Megan Horniman, chief investment officer at Verdence Capital Advisors.

While Horniman also sees a rate hike unlikely, she believes the US central bank will have to keep interest rates unchanged for the rest of the year as inflation persists.

“It’s a problem that was exacerbated by taking such a dovish tone and allowing markets to price in so many interest rate cuts early last year,” she said. “They really need to get these markets more realistic about where interest rates are going.”

-Lisa Kailai Han

Citi says negative economic surprises will eventually drag stocks down

The market has reacted positively to negative economic surprises recently, but Citi believes the “bad news is good news” narrative will soon change.

“Seasonally, surprises tend to happen at the moment, and with a Fed rate hike unlikely in the near future, good economic news is likely to be welcomed by risk assets,” analyst Nathaniel Robert wrote.

“However, as cracks appear in the labor market, further below-consensus data will eventually weigh on stocks (although the first cut may be viewed positively), as will financial conditions tighten in our view,” he added. .

-Lisa Kailai Han

Bank of America says the OpenAI event “raises the bar” for AI-based chatbots

Monday’s OpenAI event that highlighted a new desktop app and some updates “raises the bar again for consumer chatbots,” according to Bank of America analyst Vivek Arya.

The event “ups the ante on AI assistant,” he wrote in a note Tuesday, adding that semiconductor stocks should see multi-year growth tailwinds from the computing and networking capabilities needed to satisfy growing AI use cases.

Analyst Wamsi Mohan also highlighted Apple as a potential beneficiary of OpenAI, multimedia assistants and potential productivity gains.

“Much of the demo used an iPhone ‘connected to the Internet’ to reduce latency for real-time interaction,” he wrote. “Keep buying on GenAI benefits at the edge with upside gross margin and momentum in services.”

However, Rosenblatt’s Barton Crockett sees the event as a potential competitive pressure point for Alphabet ahead of Google I/O. He added that the developments also appear to have caught the attention of Apple, which has struggled for years to create similar capabilities for its Siri component.

“We believe Apple is nowhere close internally to what OpenAI just demonstrated,” he wrote. “If Google cannot demonstrate the ability to match OpenAI at I/O, Apple will be under significant pressure that we believe will partner with OpenAI to update Siri to match the current state of AI.”

-Samantha Sobin