Wall Street edges sideways
U.S. equities closed Thursday in a mixed fashion after fresh inflation data dampened expectations for aggressive Federal Reserve rate cuts. The S&P 500 added a modest 0.03%, extending its record streak to a third day. Meanwhile, the Dow slipped 0.02% and the Nasdaq dropped 0.01%. Analysts said the Producer Price Index report offered no reason to extend the rally, but also avoided triggering panic across markets.
Inflation pressures weigh on rates
Producer prices rose 0.9% in July, far above the 0.2% expected by economists. The surprise increase pushed Treasury yields higher, with the two-year climbing to 3.732% and the 10-year yield reaching 4.289%. The figures suggest tariff-related pressures are feeding into costs, limiting room for aggressive rate cuts. Still, futures markets continue to see a September rate cut as highly likely, with odds for a quarter-point move sitting above 92%.
Global moves and commodities
Global markets reflected the caution. European equities managed a 0.55% gain, while MSCI’s world index slipped 0.12% from record levels. The dollar strengthened broadly, advancing against the yen, franc, and euro. In commodities, Brent crude rose nearly 2% to $66.84 a barrel, and U.S. crude gained more than 2% to $63.96, reversing earlier weakness. Gold fell 0.57% to $3,335.34 per ounce, with futures sliding further on higher yields.
Geopolitics adds uncertainty
Investor sentiment was also shaped by geopolitical headlines. President Donald Trump warned of “severe consequences” should Russian President Vladimir Putin refuse a peace agreement in Ukraine during their Friday meeting. Trump signaled he may push for a wider summit involving Ukrainian President Volodymyr Zelensky if progress is made. The backdrop of global political risks added a layer of caution to markets already balancing growth concerns and inflationary pressures.
