Key facts
- U.S. stock indexes opened higher on Thursday.
- Crude oil prices fell, improving risk appetite.
- July producer price inflation data was 4.7%, below the expected 4.9%.
- The inflation data strengthens expectations that the Federal Reserve will hold interest rates steady.
- Traders are pricing in a 65% chance of a Fed rate hold next month.
Wall Street's main indexes opened higher on Thursday as crude oil prices fell, improving risk appetite, while investors parsed a softer-than-expected producer price inflation reading. The Dow Jones Industrial Average rose 58.3 points, or 0.11%, at the open to 53828.55. The S&P 500 rose 14.7 points, or 0.19%, at the open to 7763.18, while the Nasdaq Composite rose 42.9 points, or 0.16%, to 26631.341 at the opening bell.
Brent crude futures fell about 2.2%, after six straight sessions of gains, as investors assessed prospects for weaker global demand this year and higher U.S. crude stocks. Iran and the United States remain at loggerheads over efforts to agree on a permanent end to the war in the Middle East, according to a senior Iranian source, while traffic through the vital Strait of Hormuz remained severely curtailed.
Producer price figures came in at 4.7%, below expectations of a 4.9-per-cent gain in July. This follows benign July consumer inflation data that strengthened expectations that the Fed would hold interest rates steady at its next meeting. "Taking the two reports together, we can probably glean a very, perhaps modest, dovish print from the inflation data this month. That being said, I don’t think it’s really enough to sway the Fed one way or another just from this month’s data," said Brock Weimer, analyst, investment strategy, Edward Jones. "But, it certainly doesn’t seem that the energy price shock is having a meaningful transmission into other core categories of inflation."
Traders added to bets on an interest rate hold by the Fed next month, pricing in a 65% chance compared with 60% before the print, futures that settle to the Fed’s policy rate showed. Dow E-minis were up 166 points, or 0.31%, and S&P 500 E-minis were up 15.75 points, or 0.2%. Nasdaq 100 E-minis were up 15.25 points, or 0.05%.
The tech-heavy Nasdaq has rebounded since falling more than 10% from its all-time high two weeks ago, as strong earnings from AI hyperscalers and other technology companies revived enthusiasm for the AI trade. The Dow and the S&P 500 were hovering close to their record highs, while the Nasdaq was around 2% below its own peak.
Dow component Cisco Systems dropped 7.3% despite the networking equipment maker forecasting fiscal 2027 revenue above Wall Street expectations. Overall, robust earnings in several sectors have proven to be the latest tailwind for U.S. stocks after a rocky start to the second half of 2026. The earnings calendar is thinning out, with more than 430 S&P 500 companies having already reported for the quarter ended June. PC makers Dell Technologies and HP gained 2.8% and 6.9%, respectively, in premarket trading after earnings from China’s Lenovo beat expectations. Cerebras Systems slumped more than 16% after the AI chip designer missed quarterly revenue estimates. Its shares had rallied about 24% in the last four sessions. Accelerant soared 44.6% after private equity firm Thoma Bravo agreed to take the insurance marketplace private in an all-cash deal worth over US$4 billion. Tapestry shares plunged 10.9% despite the Coach-owner’s upbeat annual earnings forecast. The number of Americans filing claims for unemployment benefits increased moderately last week, pointing to a stable jobs market, data showed.