US stocks hold steady after wholesale prices jump
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Traders working on the floor of the New York Stock Exchange, in New York City, on Aug 14.
PHOTO: REUTERS
- Wall Street ended flat after initially falling due to the producer price index rising 0.9%, exceeding expectations.
- Analyst, Mr Ablin, suggests potential interest rate cuts by the Federal Reserve may be affected by the inflation data.
- Intel rose 7.4% following reports of Mr Trump offering assistance, while Deere & Co. dropped 6.8% after profit declines.
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NEW YORK - Wall Street stocks shook off early losses to finish essentially flat on Aug 14 as markets digested disappointing inflation data that complicates expectations for lower Federal Reserve interest rates.
The producer price index rose 0.9 per cent on a month-on-month basis, much greater than analysts expected following benign consumer pricing data earlier this week.
The Dow Jones Industrial Average finished down less than 0.1 per cent at 44,911.26.
The broad-based S&P 500 edged up less than 0.1 per cent to 6,468.54, while the tech-rich Nasdaq Composite Index was virtually unchanged at 21,710.67.
Markets have been monitoring inflation in light of President Donald Trump’s tariffs, with an Aug 12 consumer price report adding to confidence the Fed will lower rates in September.
But after the Aug 14 report, a potential half-point interest rate cut is probably “off the table,” said Mr Jack Ablin, of Cresset Capital Management.
The report “suggests that companies are currently bearing the brunt of tariffs,” Mr Ablin said.
“We would expect that companies will start to pass these costs along.”
Among individual companies, Intel surged 7.4 per cent following a Bloomberg News report that Mr Trump is considering an investment in the beleaguered chip company in exchange for a government stake.
Such a deal would represent Mr Trump’s latest departure from the US government’s traditional laissez-faire posture towards business.
Deere & Co sank 6.8 per cent after it reported a drop in profits and lowered the ceiling of its full-year earnings range. AFP
