On Thursday, the S&P 500 Index ($SPX) rose by 0.09%, while the Dow Jones Industrials Index ($DOWI) fell by 0.02%, and the Nasdaq 100 Index ($IUXX) remained unchanged. Strong U.S. Producer Price Index (PPI) data contributed to modest losses earlier in the day, with a July PPI increase of 0.9% month-over-month and 3.3% year-over-year, significantly surpassing expectations of 0.2% and 2.5%, respectively. Consequently, the likelihood of a -50 basis point rate cut at the upcoming September FOMC meeting has diminished, now assessed at a mere 7%, with a 93% chance for a -25 basis point cut.
San Francisco Fed President Mary Daly and St. Louis Fed President Alberto Musalem indicated their opposition to a -50 basis point rate cut, emphasizing the strength of the labor market. Meanwhile, U.S. weekly initial unemployment claims decreased by 3,000 to 224,000, close to expectations of 225,000. Treasury yields rose, influenced by the PPI report, with the 10-year T-note yield reaching 4.287% as the market adjusts its rate cut expectations.
In corporate news, Amazon (AMZN) rose by 2.9% while Tesla (TSLA) fell by 1.1%. Deere (DE) saw a decline of 6.8% due to cautious guidance amid lower grain prices and tariff uncertainties. Meanwhile, CVS Health (CVS) experienced a positive shift, rising by 2.4% following an upgrade to outperform.
