FX.co ★ US Stocks Slip on Inflation Surprise

On Thursday afternoon, US stocks experienced a slight downturn as unexpectedly high wholesale inflation data lessened hopes for a significant rate cut by the Federal Reserve in September. The S&P 500 and Nasdaq each declined by over 0.1%, with the Dow Jones falling more than 100 points. Notably, the Producer Price Index for July surged by 0.9% from the previous month, marking the largest increase in three years and showing an annual rise of 3.3%, significantly above the anticipated 0.2%. Despite these figures, the market still projected an 85–91% likelihood of a rate cut in September, although expectations for a 50-basis-point reduction disappeared. The materials sector was predominantly responsible for the declines, with consumer discretionary stocks struggling to maintain upward momentum. Among individual stocks, Cisco's shares fell by 1.4% as the company issued a cautious forecast despite growth driven by AI sales. Deere & Co. saw a 7.2% drop after revising its full-year earnings projection downward due to decreased farm spending. Additionally, Costco revealed it would not provide the abortion drug mifepristone in its pharmacies.