US Stocks Climb After Cooler PPI Print, Markets Scale Back Fed Hike Odds
AI Market Summary
US equities advanced after July PPI printed softer than expected (flat m/m; 4.7% y/y vs 4.9% est), reinforcing the prior day's benign CPI signal. The data reduced perceived near-term Fed tightening risk, lifting rate-sensitive growth leadership, particularly tech and communication services. Futures-implied probabilities shifted toward a September hold, supporting broader risk appetite even as inflation remains above the Fed's long-run target.
Impact level
● High
Affected assets
NCSISP5002USD/USDT+0.72%
AI Insight · NCSISP5002USD/USDTAI Insight
▲ Bullish
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US stocks advanced on Aug. 13 after new inflation data eased fears that price pressures are reaccelerating. The Bureau of Labor Statistics said July's Producer Price Index was softer than expected, helping lift major benchmarks and boosting rate-sensitive growth shares.
The S&P 500 rose about 0.5% to 0.7%, briefly setting an intraday record near 7,817. The Nasdaq Composite outperformed, up roughly 0.8% to 1.0%. Technology and communication services led the gains.
July PPI was flat month over month and up 4.7% year over year. Economists had forecast a 4.9% annual increase. June's reading was 5.5%.
The PPI report followed a similar signal from the July Consumer Price Index released a day earlier. CPI rose 3.4% year over year, while core CPI, excluding food and energy, eased to 2.5% from 2.6%.
Traders interpreted the back-to-back inflation readings as reinforcing expectations that the Federal Reserve will keep policy unchanged at the Sept. 15&16 FOMC meeting. The CME FedWatch Tool showed increased positioning for no rate change after the data.
The federal funds target range is 3.50% to 3.75%, unchanged since the July 28&29 FOMC meeting. That decision passed on a 9&3 vote, indicating three officials preferred a different outcome. The Fed has held rates in this range since December 2025 as inflation has remained above the 2% target for more than five years.
A minority of policymakers has argued for another rate increase to counter persistent inflation, though recent indicators, including a weaker-than-expected jobs report, have cooled near-term expectations. Even so, some investors remain cautious about the possibility of a hike later in 2026, with PPI still running at 4.7% and CPI at 3.4%, both above the Fed's long-run target.
