Stocks opened lower Thursday as Wall Street weighed the Trump administration's latest tariff threats against another soft inflation reading. However, the main equity indexes were positive at the close as Treasury yields declined.
Late Wednesday, President Donald Trump told reporters at the Kennedy Center that the U.S. is "rocking in terms of [trade] deals." However, he added that "at a certain point," the administration is "just going to send letters out," telling trading partners they "can take it or … leave it."
While this news initially weighed on sentiment Thursday morning, the mood quickly lifted as market participants took in the latest inflation data.
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According to the Bureau of Labor Statistics, the Producer Price Index (PPI), which measures what businesses are paying suppliers for goods, was up 0.1% month over month in May – higher than April's revised 0.2% decline, but lower than the 0.2% rise economists expected.
Year over year, wholesale prices rose 2.6%, in line with expectations.
Core PPI, which excludes volatile food and energy costs, was up 0.1% on a monthly basis and 3.0% higher year over year. Economists had called for core PPI to be up 0.3% and 3.1% monthly and yearly, respectively.
These soft back-to-back readings on inflation give "the Fed room to sit on their hands," says Chris Zaccarelli, chief investment officer for Northlight Asset Management.
"As long as inflation isn’t increasing – or even better, is decreasing – the Fed can be patient and wait for more information on how the new tariffs and trade negotiations are going to impact the price stability part of their dual mandate later this year," he adds.
The Federal Reserve will issue its next monetary policy announcement next week and we're unpacking all the news surrounding the event on our live blog.
Weekly jobless claims hold steady
As for the other part of the Fed's dual mandate, the Labor Department this morning said that initial jobless claims held steady at 248,000 in the week ending June 7.
And while the four-week moving average rose by 5,000 to 240,250 – the highest level since August 2023 – Comerica Chief Economist Bill Adams notes that there could be some seasonal distortions, considering claims rose from spring to summer in 2023 and 2024, as well.
The not-too-bad economic data – and a successful 30-year bond auction – sent Treasury yields tumbling. At the close, the yield on the 2-year Treasury was down 3.5 basis points to 3.91%, while the yield on the 10-year was 5.7 basis points lower at 4.357%.
In the equities market, the Dow Jones Industrial Average rose 0.2% to 42,967, the S&P 500 gained 0.4% to 6,045, and the Nasdaq Composite added 0.2% to 19,662.
Chime stock soars in market debut
The appetite for initial public offerings (IPOs) remains healthy, as evidenced by Chime Financial's (CHYM) market debut.
Last night, the fintech priced its offering at $27 per share, above the high end of its initial range of $24 to $26 per share. The stock opened today at $43 and hit an intraday high of $44.94 before settling at $37.11.
The Chime IPO follows several recent successful offerings, including stablecoin issuer Circle Internet Group (CRCL) and cryptocurrency platform eToro (ETOR).
Oracle has its best day in a year after earnings
Oracle (ORCL) surged 13.3% – the tech stock's best day since June 12, 2024 – after earnings.
For the three months ending May 31, the database software giant reported earnings of $1.70 per share on revenue of $15.9 billion – more than analysts expected.
Cloud revenue was up 27% year over year, while remaining performance obligations – an indication of future revenue – jumped 41%.
CFRA Research analyst Angelo Zino also highlights 62% year-over-year growth of Oracle's cloud infrastructure consumption revenue, which demonstrates "strong demand for compute and growth in AI capacity."
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