The S&P 500 Index is down 0.03% and the Dow Jones Industrials Index has fallen 0.20%, while the Nasdaq 100 Index has seen a slight increase of 0.05%. This movement follows a stronger-than-expected US PPI report for July, showing a month-on-month increase of 0.9% and a year-on-year rise of 3.3%, exceeding forecasts of 0.2% and 2.5%, respectively. Consequently, expectations for a significant rate cut by the Federal Reserve have diminished, with markets now assigning a 90% chance for a 25 basis point cut in the September meeting.
San Francisco Fed President Mary Daly and St. Louis Fed President Alberto Musalem have both indicated opposition to a 50 basis point rate cut at the upcoming meeting, citing the current strength of the labor market. Concurrently, US weekly initial unemployment claims decreased by 3,000 to 224,000, aligning closely with expectations, while continuing claims fell by 15,000 to 1.953 million, suggesting a robust labor market.
In tariff news, President Trump has extended the tariff truce with China for an additional 90 days and announced an upcoming 100% tariff on semiconductor imports, with exemptions for companies committed to U.S. production. If implemented, average US tariffs are expected to rise to 15.2%, up from 13.3% earlier this year.
