Wall street ends flat as inflation data dims rate-cut hopes, oil prices climb ahead of US-Russia summit
Wall Street stocks closed nearly unchanged on Thursday as a sharp rise in US producer prices tempered investor optimism over an expected interest rate cut, while oil prices jumped ahead of a high-stakes US-Russia summit on Ukraine.
The producer price index (PPI) rose 0.9 percent in July, well above analysts’ forecasts, following mild consumer price data earlier in the week. “The large spike in the Producer Price Index this morning shows inflation is coursing through the economy, even if it hasn’t been felt by consumers yet,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, calling the report “a most unwelcome surprise.”
Analysts warned that the data could weaken expectations for aggressive monetary easing. Futures markets still expect the Federal Reserve to cut interest rates by a quarter point next month, but a larger half-point cut now appears “off the table,” said Jack Ablin of Cresset Capital Management.
The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all ended within 0.1 percent of their opening levels. In Europe, markets in Paris, Frankfurt, and London closed higher, with London rebounding from early losses after UK economic data showed a smaller-than-expected slowdown in the second quarter as US tariffs took effect.
Oil prices rose about two percent as traders awaited Friday’s meeting between US President Donald Trump and Russian President Vladimir Putin. European leaders fear the summit could result in a settlement over Ukraine favoring Moscow, while energy markets worry that a breakdown in talks could trigger harsher sanctions on Russian oil exports. “The market is very nervous,” said Stephen Schork of the Schork Group.
On the corporate front, Intel shares surged 7.4 percent after Bloomberg reported that Trump is considering a government investment in the struggling chipmaker in exchange for an equity stake, marking another departure from Washington’s traditional hands-off approach to business.
