US stocks recovered from earlier losses on Thursday as investors once again bought the dip, despite a hotter-than-expected wholesale inflation report. The S&P 500 managed its third straight record close, by just 0.03%, ending at 6,468.54. The Nasdaq Composite dipped 0.01% to 21,710.67, while the Dow Jones Industrial Average slipped 0.02%, or 11 points, to 44,911.26.
At session lows, the S&P and Nasdaq were down 0.4%, and the Dow had shed more than 200 points before rebounding. Gains were tempered by July’s producer price index, which signalled a Federal Reserve rate cut is far from guaranteed.
Wholesale prices rise sharply
The PPI rose 0.9% in July, well above the 0.2% forecast and following a flat reading in June. Wholesale prices are often a leading indicator for consumer prices. The increase was driven largely by portfolio management costs and airfare, and without those categories the figures would have been closer to expectations.
Despite the surprise jump, traders still priced in about a 93% chance of a quarter-point rate cut in September, according to the CME FedWatch tool, though the possibility of a half-point move was eliminated.
Corporate moves and market drivers
Bloomberg reported the Trump administration is considering taking a stake in Intel, sending its shares up 7.4%. Berkshire Hathaway disclosed a new position in UnitedHealth and further reduced its Apple holdings.
In commodities and currencies, gold fell 0.6% to US$3,335.39 an ounce, Brent crude rose 1.9% to US$66.88 a barrel, and the Australian dollar dropped 0.7% to US64.98¢.
ASX outlook and key events
Australian shares are set to open modestly higher, with SPI 200 futures up 8 points, or 0.1%, to 8,838. Reporting season continues Friday with results from Cochlear and Mirvac. Offshore, China will release July retail sales, industrial production, and fixed-asset investment data, while the US will report retail sales and industrial production later tonight.
