Wall Street slips as rate-cut bets waver on hot producer inflation data
- Indexes down: Dow 0.22%, S&P 500 0.05%, Nasdaq 0.01%
- Producer inflation rises more than expected in July
- Markets reduce Fed rate-cut expectations for 2025
- Deere, Tapestry flag strains from US tariffs
Wall Street’s main indexes eased on Thursday, after a hotter-than-expected producer prices report dampened investor expectations of potential interest-rate cuts by the Federal Reserve this year.
A Labor Department report showed producer prices increased the most in three years in July due to a surge in the costs of goods and services, suggesting a broad pickup in inflation was imminent.
If producer inflation continues to rise and the Fed remains highly concerned about it, the market may need to reassess its current expectations for rate cuts, especially given rising costs on the producer side. This could put pressure on corporate profits, which in turn could impact stock market performance. Therefore, investors will be more focused on the Fed’s next move and how it will balance economic growth with the need to curb inflation.
If the data shows strong performance, it usually means that costs are rising, which may lead to higher prices for consumer goods. So it is a good time to invest in cryptocurrencies.