Wall Street struggled to extend record highs on Thursday, as investors opted to lock in profits and adopt a more cautious stance after U.S. producer inflation posted its largest increase in three years.
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The headline Producer Price Index (PPI) jumped 0.9% in July, the steepest monthly gain since June 2022, lifting the annual rate to 3.3%. Both figures far exceeded economists' forecasts of 0.2% and 2.9%, respectively.
The surge wasn't driven by volatile components such as energy or food. Core PPI -- which excludes both -- also spiked 0.9% on the month, the sharpest rise since March 2022, pushing the annual rate to 3.7%.
Traders still assign a 90% probability to a 25-basis-point Federal Reserve rate cut in September, but the odds are narrowing. Upcoming inflation and labor market data are expected to be decisive.
Despite the inflation surprise, stocks slipped only slightly, with major large-cap indices posting modest midday losses in New York. Small caps -- which had outperformed in recent days -- pulled back sharply, down 2.1%
The U.S. dollar index climbed 0.5%, supported by a 5 to 6 basis-point rise across the Treasury yield curve. The stronger greenback and higher yields weighed on gold, down 0.7% to $3,335 per ounce.
Oil prices rebounded 1.8% to $63.70 after several sessions of sharp declines, ahead of Friday's closely watched Trump–Putin meeting.
Bitcoin (CRYPTO: BTC) was the day's worst-performing major asset, tumbling 4.7% after hitting a record high above $124,000 on Wednesday. This is currently Bitcoin’s worst-performing day since April 6.
Thursday’s Performance In Major U.S. Indices
| Major Indices | Price | 1-day % Chg |
| • Nasdaq 100 | 23,830.44 | -0.1% |
| • S&P 500 | 6,456.74 | -0.2% |
| • Dow Jones | 44,771.58 | -0.3% |
| • Russell 2000 | 2,280.60 | -2.1% |
According to Benzinga Pro data:
- The Vanguard S&P 500 ETF (NYSE:VOO) eased 0.3% to $591.25.
- The SPDR Dow Jones Industrial Average (NYSE:DIA) dropped 0.4% to $447.30.
- The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) eased 0.2% to $578.99.
- The iShares Russell 2000 ETF (NYSE:IWM) tumbled 2.2% to $226.30.
- The Communication Services Select Sector SPDR Fund (NYSE:XLC) outperformed, up 0.3%; the Materials Select Sector SPDR Fund (NYSE:XLB) lagged, down 1.8%.
Stocks On The Move
- Cisco Systems Inc. (NASDAQ:CSCO) lost 1.7% after posting quarterly earnings that only slightly topped Wall Street forecasts.
- Shares of Coherent Corp. (NYSE:COHR) sank 24%. While quarterly results beat analyst projections, the company's forward guidance came in below expectations.
- Deere & Company (NYSE:DE) tumbled 7%, heading for its sharpest drop since May 2022, as investors reacted to signs of softening demand and a buildup of used machinery in the market.
- Advance Auto Parts Inc. (NYSE:AAP) fell 9.8%. The aftermarket auto-parts seller delivered stronger-than-anticipated earnings but trimmed its outlook for the rest of the year.
- Later Thursday, the market will get earnings results from Applied Materials Inc. (NASDAQ:AMAT) and Quantum Computing Inc. (NASDAQ:QUBT).
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