The three major indices on the New York Stock Exchange ended mixed. Although the U.S. Producer Price Index (PPI) for July significantly exceeded expectations, the influx of bargain hunting kept the indices largely flat.
![[New York Stock Market] Mixed Close Despite Sharp Rise in July Producer Prices](https://cphoto.asiae.co.kr/listimglink/1/2025081509185684821_1755217136.jpg)
On August 14 (local time), the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 44,911.26, down 11.01 points (0.02%) from the previous trading day. The S&P 500, which tracks large-cap stocks, rose 1.96 points (0.03%) to finish at 6,468.54, while the tech-heavy Nasdaq Composite fell 2.47 points (0.01%) to close at 21,710.67.
According to the U.S. Department of Labor, the July PPI, seasonally adjusted, surged by 0.9% from the previous month. This is the sharpest increase since June 2022, when it also rose by 0.9%. The core PPI, which excludes food and energy, also climbed 0.9%, surpassing the market forecast of 0.2%.
In the market, concerns have emerged that the sharp rise in PPI will ultimately result in tariff-driven inflation being passed on to consumers. This month’s PPI showed an unexpected increase in the 'distribution services margin,' which represents wholesalers’ and retailers’ profit margins. This suggests that suppliers are still absorbing the impact of tariffs. However, it also means that if suppliers reach their limit, the increased costs could be passed on to consumers.
Scott Ladner, Chief Investment Officer (CIO) at Horizon Investments, stated, "It is clear that the July PPI alone is not enough for the Federal Reserve (Fed) to start cutting rates or to resume a rate-cutting cycle," adding, "People seem to think this PPI print is bad, but to conclude that the inflation environment is reaccelerating, we need to see a few more indicators."
Expectations for a rate cut also diminished following the July PPI. Hopes that the Fed would implement a 'big cut' in September have dropped significantly. According to the CME FedWatch Tool, the federal funds futures market is pricing in a 92.6% probability of a 25 basis point (1bp = 0.01 percentage point) rate cut in September. The probability of a 50bp cut has disappeared, while the probability of no change is now reflected at 7.4%.
By sector, consumer discretionary, financials, healthcare, and communication services outperformed. No sector saw a move of more than 1% in either direction.
Looking at individual stocks, among the major tech companies with a market capitalization of over $1 trillion, all rose except for Apple and Tesla. Amazon gained 2.86%. Intel surged more than 7% following reports that the Trump administration is considering taking a stake in the company.
Bullish, a cryptocurrency exchange company drawing attention due to investment from Silicon Valley heavyweight Peter Thiel, saw its stock rise 9.75% on its second day of trading. On its debut the previous day, the stock had soared by more than 83%.
The number of new unemployment insurance claims filed during the week fell compared to the previous week and came in below expectations. According to the Department of Labor, for the week ending August 9, the seasonally adjusted number of initial unemployment claims was 224,000, a decrease of 3,000 from the prior week. The market expectation was 228,000.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 0.34 points (2.35%) to 14.83.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
