The S&P 500 Index ($SPX) (SPY) on Thursday rose +0.65%, the Dow Jones Industrial Average ($DOWI) (DIA) rose +0.13%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +1.15%. September E-mini S&P futures (ESU26) rose +0.68%, and September E-mini Nasdaq futures (NQU26) rose +1.18%. Stocks rallied on the favorable PPI report, which prompted a -4 bp decline in the 10-year T-note yield and a drop in expectations for a Fed rate hike in September to 35% from 40% on Wednesday.
Stocks also saw support from a drop of more than -2% in crude oil prices, amid a lack of any new US or Iranian military attacks in the Persian Gulf. Mark Cuban Says If You Win The Lottery, Don't Take The Lump Sum — And Tell People Who Ask for Money No, But 'Be Nice. No One Likes a Mean Billionaire' JPMorgan Just Upgraded Salesforce Stock.
Why Wall Street Isn't Buying Super Micro's $60 Billion Backlog Quite Yet Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. US tech stocks saw carry-over support from an overnight +3.6% rally in the South Korean Kospi index, driven in part by a more than +5% rally in Samsung Electronics and chip-maker SK Hynix. US chip stocks were strong with a +0.8% rally in the iShares Semiconductor ETF.
However, US tech stocks were undercut by an -8% drop in Cisco Systems after disappointing guidance and a more than -12% decline in Cerebras Systems (CBRS) due to a decline in sales at its hardware business. Thursday's US PPI report was favorable. The July US final-demand PPI report of unchanged m/m and +4.7% y/y was weaker than market expectations of +0.2% m/m and +4.9% y/y.
The July core PPI report of +0.2% m/m was weaker than market expectations of +0.3%, although the year-on-year figure of +4.2% y/y was slightly stronger than market expectations of +4.1% y/y. The July PPI of +4.7% y/y was down from May's 3.5-year peak of +5.9% y/y but was still far above the Fed's inflation target of +2%. Thursday's PPI report followed Wednesday's favorable July US CPI report, when the July core CPI fell to match the 5.5-year low of +2.5% y/y originally posted early this year.
Meanwhile, the nominal CPI fell to +3.4% from June's +3.5% but remained well above the 5.5-year low of +2.3% posted last year. Sep WTI crude oil prices (CLU26) fell more than -2% on the lack of any new military strikes in the Persian Gulf region and on reports that the Trump administration is pivoting to using the naval blockade to apply economic pressure on Iran rather than new military attacks. There is no sign of any progress between the US and Iran on an agreement to reopen the Strait of Hormuz, although some ships are still getting through by turning off their transponders and hoping for the best.
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