Joey Solitro
Stocks opened and closed in positive territory, though the path to the finish line was choppy. A mixed reading on wholesale inflation pressured the main benchmarks throughout the morning, but a rally in several mega-cap stocks lifted them higher in afternoon trading.
Ahead of the open, the Bureau of Labor Statistics said the Producer Price Index (PPI), which measures what businesses are paying suppliers for goods, increased 0.2% month-over-month in August. Year-over-year, headline PPI was up 1.7% – the slowest pace since February.
Core PPI, which excludes food, energy and trade services, was up 0.3% on a monthly basis and 3.3% year-over-year. While the July-to-August increase matched what was seen the month prior, the annual rise was slightly higher.
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.
"Wholesale price growth slowed last month, and today's data is unlikely to impact the Fed's near-sure decision next week," says NerdWallet Senior Economist Elizabeth Renter. "A modest rate cut is all but certain, and consumers and businesses alike will welcome it with open arms."
According to CME Group's FedWatch Tool, futures traders are pricing in a 67% probability the Fed will cut rates by a quarter-percentage point next Wednesday. Odds of a half-percentage point cut are currently at 33%.
Microsoft moves on another round of job cuts
In single-stock news, Microsoft (MSFT) rose 0.9% after a leaked internal memo indicated that the technology giant is eliminating another 650 positions in its Xbox gaming unit. This marks the third round of layoffs in the division since Microsoft bought video game maker Activision Blizzard in 2023.
Fellow Magnificent 7 stocks Alphabet (GOOGL, +2.3%) and Meta Platforms (META, +2.7%) also drew attention Thursday after a report from Janus Henderson Global Dividend Index showed U.S. dividend payouts were up 8.6% in the second quarter. The two mega-cap communication services stocks "made a significant contribution to this growth, boosting the U.S. underlying total by 3.6 percentage points," the report indicated.
Moderna plunges after cutting R&D spending
Elsewhere, Moderna (MRNA) plunged 12.4% – making it the worst S&P 500 stock today – after the COVID-19 vaccine maker slashed its research and development budget to focus on new product approvals. The company also provided its 2025 revenue outlook, which came in below analysts' expectations.
The healthcare stock is now down nearly 30% for the year to date, but there are plenty of bulls to be found. Indeed, Argus Research analyst Jasper Hellweg (Buy) has a Buy rating on MRNA and says this technical weakness creates a buying opportunity.
Micron sinks after double downgrade
Micron Technology (MU) was another notable decliner, sinking 3.8% after Exane BNP Paribas analyst Karl Ackerman issued a rare double downgrade on the semiconductor stock, to Underperform from Outperform (the equivalents of Sell and Buy, respectively).
Ackerman expects MU to underperform its artificial intelligence (AI) peers over the next year or so amid "an oversupply of high bandwidth memory" chips, which he believes will lead "to a faster-than-expected correction in DRAM selling prices."
Shares of the memory chipmaker had a red-hot start to 2024 and had more than doubled in value on a year-to-date basis as of mid-June. Since then, though, MU stock has plunged 43% on uncertainty around artificial intelligence (AI) spending.
Ackerman also cut his price target on Micron, to $67 from $73. For reference, MU closed today at $87.21.
As for the major indexes, the Dow Jones Industrial Average rose 0.6% to 41,096, the S&P 500 added 0.8% to 5,595, and the Nasdaq Composite gained 1.0% to 17,569.
Related content
- Stocks With the Highest Dividend Yields in the S&P 500
- Analysts' Top S&P 500 Stocks to Buy Now
- Will the Fed Cut Rates in September? Here's What Experts Predict
-
The Stoic Retirement: Ancient Wisdom for Today's RealityA "Stoic retirement" doesn't mean depriving yourself. It's a character-based approach to life and aging that can bring calm and clarity.
-
My Teen Crashed His Car and Now Our Insurance Has Tripled. What Now?Dealing with the costly aftermath of a teen car accident is stressful. Here are your options for navigating it.
-
11 Outrageous Ways To Spend Money in RetirementWhether you have excess cash to spend or want to pretend, here’s a look at 11 ridiculous ways retirees can splurge.
-
I'm a Financial Planner for Millionaires: Here's How to Give Your Kids Cash Gifts Without Triggering IRS PaperworkMost people can gift large sums without paying tax or filing a return, especially by structuring gifts across two tax years or splitting gifts with a spouse.
-
'Boomer Candy' Investments Might Seem Sweet, But They Can Have a Sour AftertasteProducts such as index annuities, structured notes and buffered ETFs might seem appealing, but sometimes they can rob you of flexibility and trap your capital.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Got $100 to Gamble? These Penny Stocks Could Be Worth the RideVolatile penny stocks are high-risk plays with potentially high rewards. If you have $100 you can afford to lose, these three names are worth a look.
-
Quick Question: Are You Planning for a 20-Year Retirement or a 30-Year Retirement?You probably should be planning for a much longer retirement than you are. To avoid running out of retirement savings, you really need to make a plan.
-
Don't Get Caught by the Medicare Tax Torpedo: A Retirement Expert's Tips to Steer ClearBetter beware, because if you go even $1 over an important income threshold, your Medicare premiums could rise exponentially due to IRMAA surcharges.
-
I'm an Insurance Pro: Going Without Life Insurance Is Like Driving Without a Seat Belt Because You Don't Plan to CrashLife insurance is that boring-but-crucial thing you really need to get now so that your family doesn't have to launch a GoFundMe when you're gone.
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
