FX.co ★ US Equities Muted After Hot PPI

On Thursday, US stock markets closed mostly unchanged, following hotter-than-anticipated wholesale inflation data that tempered expectations for a significant Federal Reserve rate cut in September. The S&P 500 registered slight gains, marking its third consecutive day of increases, while the Dow and Nasdaq remained relatively steady. The Producer Price Index for July surged by 0.9% from the previous month—the most significant rise in three years—and showed a 3.3% increase year-over-year, surpassing the forecasted 0.2%. Despite the surprising inflation figures, there remains an 85–91% probability of a rate cut in September, although the prospect of a 50-basis-point reduction has been dismissed. The materials sector recorded losses, and consumer discretionary stocks found it challenging to sustain earlier gains. Intel experienced a 7.4% surge after Bloomberg reported on discussions of the US government potentially acquiring a stake in the company. Conversely, Cisco saw a 1.4% decline after presenting a cautious outlook despite growth driven by AI sales, and Deere & Co. dropped 6.8% following a reduction in its full-year earnings forecast due to diminished farm spending.