Wall Street set to open lower after hot producer inflation data
Wall Street is poised to open lower Thursday following a hotter-than-expected rise in U.S. producer prices, raising doubts about potential interest-rate cuts by the Federal Reserve later this year.
The Labor Department reported that the Producer Price Index climbed 3.3% year-on-year in July, above economists’ forecast of 2.5%, and rose 0.9% from June. The data has led traders to scale back expectations for Fed rate cuts in 2025, though a quarter-percentage-point reduction in September remains fully priced in, News.Az reports, citing Reuters.
Futures indicated declines for major indexes ahead of the opening bell: Dow E-minis down 0.31%, S&P 500 E-minis down 0.32%, and Nasdaq 100 E-minis down 0.36%. The Russell 2000 index, sensitive to rates, lost 1.2%.
Investors also reviewed other economic signals, including weekly new unemployment claims at 224,000, slightly below estimates. Concerns persist that U.S. tariffs on imports could further push prices higher, potentially slowing the recent stock rally that pushed the S&P 500 and Nasdaq to record highs.
Corporate earnings added to market volatility. Cisco Systems forecasted stronger-than-expected first-quarter revenue, driven by AI growth, but saw shares drop 2% premarket. Deere & Co. fell 6.5% after lowering its annual profit forecast, while Tapestry plunged 12% amid tariff-related concerns.
Later Thursday, investors will focus on remarks from St. Louis Fed President Alberto Musalem, a voting member of this year’s Federal Open Market Committee.
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