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The Star
3 days ago
- Business
- The Star
U.S. stocks close mixed on hot wholesale inflation
NEW YORK, Aug. 14 (Xinhua) -- U.S. stocks ended mixed on Thursday, as investors once again bought the dip despite a disappointing wholesale inflation report. The Dow Jones Industrial Average slipped 11.01 points, or 0.02 percent, to close at 44,911.26. The S&P 500 inched up 1.96 points, or 0.03 percent, to 6,468.54, while the Nasdaq Composite dipped 2.47 points, or 0.01 percent, to 21,710.67. Earlier in the day, both the S&P and Nasdaq were down as much as 0.4 percent before recovering, while the Dow had been more than 200 points lower at one point. Seven of the 11 major S&P 500 sectors declined, with industrials and materials leading declines, down 0.88 percent and 0.81 percent, respectively. Financials and health care were the top gainers, rising 0.55 percent and 0.5 percent. The producer price index (PPI), which tracks prices for final demand goods and services, surged 0.9 percent in July -- the largest jump since June 2022 -- far exceeding the Dow Jones estimate of a 0.2 percent increase, according to a Thursday report from the U.S. Bureau of Labor Statistics. Core PPI, which excludes food and energy, also rose 0.9 percent, tripling the projected 0.3 percent. When excluding food, energy and trade services, the index climbed 0.6 percent, the fastest pace since March 2022. On an annual basis, the headline PPI rose 3.3 percent, the largest increase since February, while core PPI rose 3.7 percent. "Producers are starting to feel the inflation fire heat," Chris Rupkey, chief economist at FwdBonds, said Thursday. "It will only be a matter of time before producers pass their higher tariff-related costs on to the backs of inflation-weary consumers." Despite the stronger-than-expected inflation figure, traders continued to anticipate a September interest rate cut, with fed funds futures pricing in roughly a 93 percent probability, only marginally lower than the prior day, according to the CME FedWatch tool. "It seems to be reasonably clear at this point that this wasn't enough to get the Fed off of another cut, or get it going on a cutting cycle," said Scott Ladner, chief investment officer at Horizon Investments. Mega-cap technology stocks mostly rose. Amazon gained 2.87 percent, while Nvidia, Microsoft, Alphabet, Meta Platforms, and Broadcom posted smaller gains. Tesla fell 1 percent, and Apple edged slightly lower.
Yahoo
3 days ago
- Business
- Yahoo
Businesses have been eating Trump's tariffs. That's starting to change
Costs were sharply on the rise for producers and manufacturers in July, a sign that higher prices could soon filter down to American consumers. US inflation on the wholesale level picked up steam last month, with prices rising by the fastest monthly pace since June 2022, new data showed Thursday. The latest Producer Price Index, which measures the average change in prices paid to producers, jumped 0.9% from June, lifting the annual rate to 3.3%, according to Bureau of Labor Statistics data. PPI serves as a potential bellwether for the prices consumers may see in the months ahead. 'Producers are starting to feel the inflation fire heat,' Chris Rupkey, chief economist at FwdBonds, wrote Thursday. 'It will only be a matter of time before producers pass their higher tariff-related costs on to the backs of inflation-weary consumers.' Thursday's readings far exceeded economists' expectations for prices would rise by just 0.2% in July and 2.4% annually. The Dow fell 175 points, or 0.4%, at the opening bell on Thursday. The broader S&P 500 fell 0.35% and the tech-heavy Nasdaq Composite dropped 0.3%. Earlier this week, the Consumer Price Index for July showed that falling gas prices kept a lid on overall consumer price hikes but that tariff-sensitive goods continued to get more costly. 'The large spike in PPI this morning shows inflation is coursing through the economy, even if it hasn't been felt by consumers yet,' said Chris Zaccarelli, chief investment officer at Northlight Asset Management. 'Given how benign the CPI numbers were on Tuesday, this is a most unwelcome surprise to the upside and is likely to unwind some of the optimism of a 'guaranteed' rate cut next month.' Traders pared their bets that the Federal Reserve would cut its benchmark lending rate at its September meeting. Excluding food and energy, core PPI also shot higher by 0.9%, sending the annual rate to 3.7%, the highest level since March. This story is developing and will be updated. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-06-2025
- Business
- Yahoo
US wholesale inflation heated up in May
US wholesale inflation rose slightly in May, driven higher in part by costlier goods. The latest Producer Price Index, a closely watched measurement of wholesale inflation, showed that prices paid to producers rose 0.1% in May, lifting the annual rate to 2.6%, according to Bureau of Labor Statistics data released Thursday. Economists were expecting that prices would rise 0.2% from April and 2.6% for the 12 months ended in May. The upswing marked a turnabout from a 0.2% drop in April, which was driven largely by wholesalers and retailers' margins being squeezed, which economists attributed to higher tariffs. Revisions to April's PPI data showed that margins weren't eaten up as much as previously thought: The initially reported 1.7% plunge in the trade services category was revised to a 0.5% drop. In May, trade services posted an increase of 0.4%, according to the report. Goods-related inflation picked up for the month, rising 0.2%, while services inched higher by 0.1%. During the past year, the overall PPI was heavily influenced by swings — both positive and negative — in food and energy. Both categories in May, however, were tame, as foods rose by 0.1% and energy prices were unchanged. About 80% of the increase seen in goods prices last month came from areas other than food and energy. Economists have recently indicated that the price pressures from tariffs would show up first in 'core goods' (goods that exclude food and energy). Monthly data can be volatile; however, the prices producers received for durable consumer goods shot 0.4% higher in May, logging the largest monthly increase that category has seen since January 2023, BLS data shows. 'The inflation fires are still percolating down at the producer level for goods prices, and price increases there may be coming soon to the consumer level at a store near you,' Chris Rupkey, chief economist at FwdBonds, wrote in commentary Thursday. Excluding food and energy, which are categories that typically have more volatility, core PPI rose slightly as well, increasing 0.1% from April. On an annual basis, core PPI inflation eased slightly to 3% from 3.1%. PPI serves as a potential bellwether for retail-level inflation in the months ahead. On Wednesday, the latest Consumer Price Index data showed that overall inflation rose less than expected for goods and services commonly purchased by Americans. Economists warn, however, that President Donald Trump's sweeping tariffs are expected to eventually result in some price increases for consumers. This story is developing and will be updated. Sign in to access your portfolio
CNBC
11-06-2025
- Business
- CNBC
The latest CPI report showed some softening in inflation. What investors are saying
Wall Street got a favorable inflation report on Wednesday, giving equities a boost. The consumer price index rose 0.1% in May , slightly less than the 0.2% increase economists polled by Dow Jones anticipated. So-called core CPI, which strips out volatile food and energy prices, increased by 0.1% — also less than expected. Stocks reacted positively, with S & P 500 futures erasing an earlier decline to trade about 0.2% higher. Some investors noted continued uncertainty around the Federal Reserve's interest rate outlook, despite the latest price report. Here's how some investors, economists and strategists reacted to the news: Chris Rupkey, chief economist at FWDBonds: "Net, net, the inflation shock wave from more costly imported goods has yet to arrive on American shores. Today's consumer inflation report is a real head-scratcher for economists as they ponder why the trade war hasn't set off another inflation outbreak yet with core goods prices sitting on store shelves seeing no change in May." Alexandra Wilson-Elizondo, global co-CIO of multi-asset Solutions at Goldman Sachs Asset Management: "Inflation in May was lower than anticipated, suggesting the tariffs aren't having a large immediate impact because companies have been using existing inventories or slowly adjusting prices due to uncertain demand. While we might see some price increases on goods later, service prices are expected to remain stable, suggesting any rise in inflation is likely to be temporary." Ian Lyngen, head of U.S. rates at BMO Capital Markets: "CPI surprised on the downside across the board. … The yield curve is bull steepening as the slower trajectory of inflation has firmed rate cut expectations for later this year. On the margin, it is also supportive of next week's [Federal Reserve Summary of Economic Projections] signaling 50 bp of cuts in 2025." Ryan Weldon, investor director and portfolio manager at IFM Investments: "The softer services inflation lends itself to a slowing economy in the face of continued tariff anxiety and will support the Fed to come out of their wait-and-hold approach sooner. However, the Fed will still want to see several months of consistent inflation and jobs data and have more clarity on the Trump administration's tariff policy before resuming cuts." Chris Zaccarelli, chief investment officer at Northlight Asset Management: "With lower-than-expected numbers across the board (with the exception of headline YoY, which stayed constant), and a trade deal with China that was agreed to in London, the narrative around tariff-induced inflation should subside. However, CPI remains above 2% and even though the tariff rates are going to be less than originally feared, after they are implemented they will further increase the cost of goods." Skyler Weinand, chief investment officer at Regan Capital: "Wednesday's weaker-than-expected CPI opens the door to a Fed rate cut in September, since it's clear that the inflation data continues to move in the right direction even as we deal with tariff uncertainty. While employment is strong and the economic effects from tariffs are yet to be determined, the Fed would like to start easing again in the not too distant future to get in front of a possible recession in 2026" Peter Boockvar, chief investment officer at Bleakley Financial Group: "Bottom line, a sigh of relief on the lower than expected inflation stats just as we search for where tariffs will work its way through the supply chain and end customer."
Yahoo
30-05-2025
- Business
- Yahoo
Americans pulled back on their spending in April amid tariff rollout
American consumers reined in their spending and socked away their money in April following a tariff-fueled buying binge the month before, according to new data released Friday that also showed inflation cooled off again. Friday's report from the Commerce Department showed that consumer spending rose 0.2% last month, a weaker-than-anticipated reading but a notable retreat from March, when spending soared 0.7% as Americans front-loaded purchases — notably new cars — ahead of potential price increases from President Donald Trump's tariffs. In April, consumers saw a nice 0.8% boost to their incomes, a jump likely attributed to larger Social Security payments as well as continued resilience in the labor market; however, a lot of those funds were plunked into piggy banks: The personal saving rate leapt to 4.9% from 4.3%, according to Friday's report. 'Just as you'd expect, consumers stayed away from the purchase of durable goods like clothing and cars and instead spent mostly on life's necessities like housing, health care, and food services,' Chris Rupkey, chief economist at FwdBonds, wrote in commentary issued Friday. 'This is a trade war report where the consumer is clearly gun-shy.' The latest data also showed inflation moving closer to the Federal Reserve's target of 2%. However, it also indicated that tariff-related price pressures may be already hitting consumers. The Personal Consumption Expenditures price index was 2.1% for the 12 months ended in April, a slowdown from the 2.3% annual gain in March. On a monthly basis, prices rose 0.1%, a slight acceleration after holding steady in March. The biggest price gains last month were seen in durable goods, which rose 0.5%. Economists were expecting the PCE price index to rise 0.2% from March and to ease to an annual rate of 2.2%. Spending was expected to slow to 0.4%, according to FactSet. Inflation is now back at its lowest rate in years, matching a 2.1% gain in September 2024 that was, at the time, a three-and-a-half-year low. Excluding the volatile food and energy categories, the core PCE price index rose 0.1% from March and slowed to an annual rate of 2.5%, the lowest rate since March 2021. Inflation is sitting just a hair's breadth above the Fed's 2% target; however, there likely will be no victory laps nor corks popped from the Fed: Inflation may have been on a cooling course, but the Trump administration's tariffs — the bulk of which are in a temporary holding pattern — threaten to reverse that progress. While the tariffs themselves remain in flux — especially following a US Court of International Trade ruling this week that blocked a large swath of them and a subsequent appeals court ruling that put them back into play — economists weren't expecting the early wave of import duties to have an immediate effect on prices nor on the April inflation data. 'We're looking at very backwards-looking data; we're looking into April, and it's hard to say (to what extent) the total effects of the tariffs have come through,' Dan North, senior economist at Allianz Trade US, said in an interview with CNN. 'I think there's a reasonable case to be made that each report is not going to be quite so rosy as this.' And, with spending and incomes holding up for now, the Fed has the luxury of being able to continue to not have to rush through any interest rate cuts just yet, he said. 'The Fed would really like to see that core and the headline (inflation rates) going down a bit more, because if they cut rates, they might reignite that inflation flame that hasn't gone out already,' he said. There have been significant shifts in tariff policy, and some of the most aggressive duties were curtailed or paused; businesses front-loaded purchases, building up their pre-tariff inventory; and some costs from the initial waves of new tariffs might have been absorbed by retailers and manufacturers. The latest data lands at a time when uncertainty is swelling about the extent to which Trump's sweeping policies — including efforts to tack steep tariffs on most imported goods — could upend global order and the US economy. But that massive uncertainty caused by Trump's policies could negatively ripple through the economy by affecting how consumers and businesses spend. 'Uncertainty is an actual driving force in the economy, and on the business side, they're shaking their heads saying, 'we don't know what to do; our customers are cutting their orders,'' North said. 'Given that atmosphere and this continuous changing in the tariff situation, I see hiring really slowing down in the next couple of months.' A batch of labor market data is due out next week, with the most critical piece being the May jobs report on Friday morning. Economists are still building their forecasts, but early estimates show they expect monthly job gains to slow sharply to around 125,000 from 177,000 in April and for the unemployment rate to tick up to 4.3%. While economists have warned that the better-than-expected data seen in recent months is the calm before the storm, the economy is holding its own for now — despite the ongoing volatility and recession fears. 'I think it's going to be a lot of 'See, I told you,'' coming from the Trump administration, North said. 'They'll likely say that everything is going right, inflation is right, income is right, spending is right, and then the trade deficit in goods is cut in half.' However, it remains to be seen how long this resilience lasts and to what extent the volatility weighs on the economy. Stocks fell Friday after President Donald Trump said China has 'totally violated' its trade agreement with the United States, sending another jolt to markets after a whiplash week of tariff developments. Separate data released Friday by the Census Bureau showed that the United States' trade deficit with its trading partners dropped by 46% last month. Trade deficits capture the difference between a country's exports minus imports. Last month, American exports grew by $6.3 billion, while imports declined by a whopping $68.4 billion. The stunning decline in imports could mean retailers have less of an inventory buffer, leaving them less able to avoid paying future tariffs — and that could lead to price increases for US consumers. CNN's Elisabeth Buchwald and John Towfighi contributed to this report. Sign in to access your portfolio
