Wall Street’s major indexes closed lower on Thursday after October’s producer price data came in largely as expected, with investors awaiting comments from Federal Reserve Chairman Jerome Powell later in the day for more guidance on interest rates.
The Producer Price Index (PPI) for final demand rose 0.2% month-over-month in October, in line with forecasts. The year-over-year PPI increase of 2.4% was slightly above expectations, raising concerns about persistent inflation. Jobless claims for the week ending November 9 fell by 4,000 to 217,000, better than expected.
Keith Buchanan, senior portfolio manager at Globalt Investments, noted the data suggests a potential “soft landing” for inflation and employment, though rising Treasury yields could signal trouble for the economy. The U.S. 10-year Treasury yield climbed to its highest level since July, reflecting shifting inflation expectations. This led traders to slightly reduce their bets on a rate cut at the Fed’s December meeting, with the probability now at 79.1%, down from 82%.
The Dow Jones Industrial Average fell 36.90 points, or 0.08%, to 43,921.29. The S&P 500 dropped 9.36 points, or 0.16%, to 5,976.02, and the Nasdaq Composite lost 34.83 points, or 0.18%, to 19,195.90. Disney’s 10.4% jump, after reporting stronger-than-expected earnings, helped limit losses on the Dow.
Tech stocks sensitive to rate hikes, including Tesla and Alphabet, each lost more than 1%. The real estate sector was the biggest laggard on the S&P 500.
Powell’s upcoming remarks in Dallas are expected to provide more clarity on the Fed’s outlook. Some Fed officials have voiced concerns about lingering inflation risks, even as the central bank contemplates future rate cuts.
Fed Governor Adriana Kugler acknowledged the progress made in addressing inflation, though challenges remain.
Meanwhile, Tapestry, the parent 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 fell 4.2%.
In the cryptocurrency sector, Marathon Digital (MARA) and MicroStrategy (MSTR) gained as Bitcoin prices rose, fueled by hopes of favorable policies under the incoming Trump administration.
On the broader market, 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 posted 16 new 52-week highs and 6 new lows, while the Nasdaq recorded 37 new highs and 61 new lows. Investors are also awaiting further comments from other Fed officials, including New York Fed President John Williams, for more insight into the central bank’s policy direction.