Major United States benchmarks traded in a mixed fashion on Thursday (Friday AEST), as the S&P 500 secured its third consecutive record close, overcoming earlier losses triggered by a hotter-than-expected wholesale inflation reading.
The Dow Jones Industrial Average slipped 11 points or 0.02% to 44,911.3, The S&P 500 ticked up by 1.9 points or 0.03% to finish at 6,468.5, while the tech-heavy Nasdaq eased just 2.5 points or 0.01% to 21,710.7.
Both the S&P 500 and Nasdaq had been down as much as 0.4% at their intraday lows, while the Dow fell more than 200 points before staging a recovery.
The session’s early weakness followed the release of July’s producer price index (PPI), which rose 0.9% month-on-month, far above market expectations for a 0.2% increase.
The reading, which had been flat in June, suggested persistent inflationary pressures and clouded the outlook for a Federal Reserve rate cut.
Some market participants, however, dismissed the headline surge as being driven largely by outsized gains in “portfolio management” services and airfare.
Excluding these factors, the figures would have aligned more closely with forecasts.
Despite the unexpectedly strong PPI data, the CME Group FedWatch Tool showed fed funds futures pricing in a 92.1% probability of a September rate cut, only slightly down from the day before. However, the odds of a more aggressive half-point cut were eliminated.
Investors entered the day with optimism after the S&P 500 and Nasdaq both hit record highs in the prior session, buoyed earlier in the week by a softer-than-expected July consumer price inflation report.
On the bond markets, yields rose, with the 10-year Treasury climbing 1.3% to 4.289% and the 2-year yield advancing 1.5% to 3.735%.
