Stocks traded lower at open on Thursday, with the Dow Jones Industrial Average falling nearly 200 points as the market reacted to a hotter-than-expected inflation report.
Summary
- Stocks fell as the producer price index came in hotter than expected.
- Dow dropped sharply before showing a slight recovery, while Bitcoin slipped from all-time highs of $124k
The Dow Jones Industrial Average declined nearly 200 points, or about 0.4%, as Wall Street digested the latest producer price index data. The S&P 500 also shed gains, slipping about 0.3% to move off record highs reached in the previous session. Overall sentiment around the PPI inflation print for July also weighed on the Nasdaq Composite, which fell about 0.2%.
As stocks fell amid an injection of negative sentiment, cryptocurrencies pared gains. The volatility was sharp.
The crypto market cap dropped by about 2.6% to hover just above $4 trillion, with Bitcoin (BTC) declining to around $118,500 and Ethereum (ETH) retreated to around $4,600. In comparison to prices prior to PPI data, BTC had reached an all-time high of $124,457 earlier in the day.
Stocks fall on hot PPI
Wall Street’s reaction followed July’s producer price index data, which showed PPI PPI rose 0.9% month-over-month, far above the consensus estimate of 0.2%. The inflation report also showed producer prices climbed 3.3% annually in July, the highest since February 2025. Meanwhile, “core” PPI, which excludes food and energy costs, rose at levels last seen in June 2022.
The S&P 500 and Nasdaq remain near record highs, reached as Wall Street celebrated corporate earnings and cooler-than-expected CPI. However, the latest inflation report on wholesale costs injected jitters into the market, with investors concerned the PPI reading could lead the Federal Reserve to delay a rate cut in September.
Despite the hotter data, fed funds futures still signaled a bullish outlook, with investors pricing the odds of a Fed rate cut in September at 93%, down only slightly from 94% on Wednesday. Traders monitoring other market factors helped the Dow recover part of its losses, though it was still down 98 points at the time of writing.
