The nasdaq gave up gains and closed lower on Thursday, despite new signs that inflation is coolingbecause investors perceived that the Federal Reserve still has to raise interest rates aggressively to fully curb rising consumer prices.
The S&P 500 retreated from earlier hitting new three-month highs, after data showed the United States Producer Price Index fell unexpectedly in July.
The fall in the Producer Price Index (PPI) increased bets in futures markets that the Federal Reserve would raise interest rates by 50 basis points in September, instead of 75 basis points as expected earlier in the week.
The S&P 500 and the nasdaq they had risen more than 2% on Wednesday after a weaker-than-expected measure of consumer inflation.
With the working market Showing signs of weakness as the number of Americans filing for new jobless benefits rose for the second week in a row, the Nasdaq fell as investors doubted the strength of the economy.
“Yesterday (Wednesday), the CPI was better than expected and this morning the IPP has been better than expected by analysts. So it fits with that theme, that peak inflation has come as energy continues to decline,” said George Catrambone, head of Americas trading at DWS Group. “But I would be concerned if it’s news misleading”.
Mixed results at the close of the day on Wall Street
The S&P 500 lost 2.97 points, or 0.07%, to 4,207.27 units, while the nasdaq it lost 74.90 points, or 0.58%, to 12,779.91 units. The Dow Jones Industrial Average it rose 27.16 points, or 0.08%, to 33,336.67 units.
Six of the 11 main sectors of the S&P 500 rose, with energy.
The yields of US treasury bonds hit more than two-week highs as fixed-income investors bet the Fed will keep raising rates amid inflation still high, but price pressures have eased somewhat.
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