Stocks wobble after PPI data

Markets drift lower as July PPI data dims hopes for a near term rate cut and leaves investors watching upcoming releases.

Dow and S&P decline as PPI data weighs on market

The Dow fell about 140 points and the S&P 500 slipped 0.1 percent, while the Nasdaq swung between gains and losses as traders digested hotter than expected PPI inflation data. The market breadth remained weak, with only a subset of stocks lifting the indices and roughly a hundred components in the S&P 500 on track to close higher. Nvidia and AMD were among the movers in a session where tech leadership offered little comfort for a broad rally.

The July producer price index data adds to inflation concerns and dents the case for an imminent half point rate cut in September. Investors now focus on a flurry of data releases ahead of the Fed’s mid September meeting, seeking any signal that inflation is cooling. The day’s moves come after a period of record closes, underscoring a market that is sensitive to data but not yet convinced the uptrend has broad support.

The current moves show a market leaning on a handful of big names while the rest drift. That dynamic makes the next leg of the rally data dependent rather than driven by broad improvement in earnings or growth. If inflation stays hotter longer, the Fed might delay or slow the pace of rate cuts, keeping volatility alive.

On the upside, a cooling of inflation in coming releases could rekindle the appetite for risk and help sidelined parts of the market catch a bid. For now, traders should prepare for more bursts of excitement followed by pullbacks as data flow sets the tempo.

Highlights

The data loop will keep guiding the next moves in markets