Traders work on the floor of the New York Stock Exchange (NYSE) on August 12, 2025 in New York City.
Spencer Platt | Getty Images News | Getty Images
Stocks slipped on Thursday after a new inflation report showed that wholesale costs rose more than expected last month
The Dow Jones Industrial Average lost 200 points, or about 0.5%. The S&P 500 shed 0.4%, while the Nasdaq Composite slid 0.3%.
Investors came into the session riding high, with the S&P 500 and Nasdaq posting fresh record highs in the previous session. The benchmarks got a jolt earlier this week after the release of a cooler-than-expected consumer price inflation report for July. That report stoked hopes among investors for a rate cut from the Federal Reserve at the end of its September policy meeting.
However, investors were left feeling disappointed after July’s producer price index reading indicated that such a rate cut is far from guaranteed. Wholesale prices rose 0.9% on the month, much more than the 0.2% economists polled by Dow Jones were expecting. The index had come in flat in June. Wholesale prices can be a leading indicator for consumer prices.
Some traders were looking past this PPI number because the report showed the increase was driven by a large gain in “portfolio management,” along with airfare. Without those factors the figures would have been much closer to estimates.
Despite the higher inflation number, fed funds futures were pricing in about 93% odds of a rate cut in September, only slightly lower from the day prior, according to the CME’s FedWatch tool. The futures, however, did remove any chance of a half-point cut.
Tech shares like AMD and Nvidia that have led the bull market turned lower following the hot inflation numbers.
Shares of Cisco fell 1% on the heels of the major tech company’s fourth-quarter results narrowly beating expectations. The company’s outlook was about in in line with expectations. Deere shares lost 7% on mixed full-year guidance.