Wall Street’s major indexes ended Thursday with modest losses after October’s producer price data came in as expected, leaving investors focused on upcoming remarks from Federal Reserve Chairman Jerome Powell regarding interest rates.
The Producer Price Index (PPI) for final demand rose 0.2% in October, matching forecasts. The year-over-year PPI increase of 2.4% was slightly higher than expected, raising concerns about ongoing inflation pressures. Meanwhile, jobless claims for the week ending November 9 fell by 4,000 to 217,000, better than anticipated.
Keith Buchanan, senior portfolio manager at Globalt Investments, noted that the data points to a possible “soft landing” for inflation and employment. However, he warned that rising Treasury yields could signal challenges ahead for the economy. The U.S. 10-year Treasury yield hit its highest level since July, signaling a shift in inflation expectations. Traders slightly scaled back their bets on a December rate cut, now pricing in a 79.1% chance of a 25-basis-point reduction, down from 82%.
The Dow Jones Industrial Average declined 36.90 points, or 0.08%, to 43,921.29. The S&P 500 fell 9.36 points, or 0.16%, to 5,976.02, and the Nasdaq Composite dropped 34.83 points, or 0.18%, to 19,195.90. However, the Dow was helped by a 10.4% rally in Walt Disney shares following better-than-expected earnings.
Growth stocks, sensitive to interest rate movements, underperformed. Tesla and Alphabet each lost more than 1%, while the real estate sector was the weakest performer on the S&P 500.
With Powell scheduled to speak in Dallas later today, investors are hoping for more clues about the Fed’s future policy direction. Some Fed officials have recently expressed concerns about persistent inflation risks, even as the central bank weighs rate cuts.
Fed Governor Adriana Kugler remarked that while the central bank has made significant progress on inflation, challenges remain in fully achieving its target.
Tapestry, the parent company of Coach, surged 8.8% after announcing it would cancel its $8.5 billion acquisition of Capri Holdings, which was blocked by a U.S. judge. Capri’s stock dropped 4.2%.
In the cryptocurrency sector, Bitcoin-related stocks gained, with Marathon Digital (MARA) rising 2.6% and MicroStrategy (MSTR) climbing 4.6%, as Bitcoin prices continued to rise amid optimism over regulatory policies under the incoming Trump administration.
Advancing stocks outpaced decliners, with a 1.29-to-1 ratio on the NYSE and a 1.12-to-1 ratio on the Nasdaq. The S&P 500 recorded 16 new 52-week highs and 6 new lows, while the Nasdaq saw 37 new highs and 61 new lows. Investors are also awaiting additional comments from Fed officials, including New York Fed President John Williams, for further insights into the central bank’s outlook.