Stock Market Today: Stocks Close Mixed on Wholesale Inflation Surprise
A hot reading on producer prices led to widespread selling, but a handful of blue chip stocks carved out gains.
Stocks closed mixed Friday as market participants weighed a hotter-than-expected reading on wholesale-price inflation. Although select pockets of strength offset some of the selling pressure, by the closing bell two of the three major indexes closed in the red.
Downbeat economic data dominated Friday's session as market participants digested an unwelcome reading on inflation that came in the form of the Producer Price Index (PPI).
PPI, which measures wholesale prices, rose 0.3% in July, the Bureau of Labor Statistics said Friday. That was the highest reading since January and showed an acceleration in inflation vs the previous month when prices were flat. Economists were looking for PPI to rise just 0.2% in July.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The core producer price index caused even more market trouble. Core PPI, which excludes volatile food, energy and trade services prices, is considered to be a better indicator of future inflation, and it also surprised to the upside. Core PPI rose 0.2% in July – or the largest gain since February – vs a 0.1% increase the previous month.
The disappointing PPI report, coming as it did just a day after an encouraging reading on consumer price inflation, served as an unwelcome reminder that the Federal Reserve's fight against inflation is far from finished.
"The higher-than-expected PPI is not great news for the Fed as PPI tends to be a leading indicator for consumer inflation," writes Giampiero Fuentes, an economist at Raymond James. "Today's report continues to show signs that while inflation has been decelerating, the Fed's journey to bring it to its 2% target is not over and it will take more months of positive data to convince the Fed that it is."
On Thursday, the July Consumer Price Index (CPI) report showed that core inflation posted its smallest back-to-back monthly increase in two years.
Blue chip oil stocks bounce
Pricey tech stocks bore the brunt of Friday's selling, sending the Nasdaq Composite down 0.7% to finish at 13,644. The broader S&P 500 fared a bit better but still closed down 0.1% at 4,464.
Happily, rising prices for crude oil made winners out of select blue-chip stocks in the energy sector. Forecasts for a supply deficit helped U.S. benchmark crude futures rise 32 cents to $83.09 a barrel. That, in turn, made winners out of oil & gas giants such as Exxon Mobil (XOM, +1.5%), ConocoPhillips (COP, +1.7%) and Chevron (CVX, +2.0%), a Buy-rated Dow Jones stock.
Indeed, CVX helped the Dow Jones Industrial Average escape the day with a gain, closing up 0.3% at 35,285.
Related Content
-
How New Investors Can Pick Their Perfect Portfolio, According to a ProSee what Cullen Roche has to say about finding your perfect portfolio as a new investor and his two-word answer on where he thinks the stock market is headed in 2026.
-
HNW Retirees: Don't Overlook The Benefits of Social SecurityWealthy retirees often overlook Social Security. But timed properly, it can drive tax efficiency, keep Medicare costs in check and strengthen your legacy.
-
Do You Have an Insurance Coverage Gap for Your Valuables?Standard homeowners insurance usually has strict limits on high-value items, so you should formally "schedule" these valuable possessions with your insurer.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
Risk Is Off Again, Dow Falls 397 Points: Stock Market TodayMarket participants are weighing still-solid earnings against both expectations and an increasingly opaque economic picture.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
Stocks Close Out Strong Month With Solid Amazon Earnings: Stock Market TodayAmazon lifted its spending forecast as its artificial intelligence (AI) initiatives create "a massive opportunity."
