US stocks opened higher on Thursday, buoyed by a softer-than-expected producer price report and a sharp retreat in crude oil prices, which together reinforced expectations that the Federal Reserve will leave interest rates unchanged at its September meeting.
The Dow Jones Industrial Average gained roughly 99 points, or 0.19%, while the S&P 500 rose 0.33% and the Nasdaq Composite added 0.29%. The moves came as investors digested the latest inflation data and a drop in energy costs that helped ease concerns about the impact of geopolitical tensions on the global economy.
Producer prices cool, supporting a patient Fed
The Labor Department reported that the Producer Price Index (PPI) was flat in July on a monthly basis, versus expectations for a 0.2% increase. Core PPI, which strips out volatile food and energy prices, rose 0.2%—slightly below the 0.3% forecast. The data follows Wednesday's consumer price index, which showed headline inflation up 0.1% in July, in line with estimates.
Together, the reports suggest that inflationary pressures remain contained even with elevated energy prices. Following the release, traders increased the probability of a Fed pause in September to roughly 65%, up from about 60% before the PPI print, according to CME FedWatch.
Weekly jobless claims also rose modestly, pointing to a labor market that remains stable despite signs of slower economic activity. The combination of cooling inflation and a resilient jobs picture gives the central bank room to hold rates steady while it assesses the outlook.
Oil pulls back from six-day rally
Crude prices fell about 2% on Thursday, with Brent slipping to around $87 a barrel and West Texas Intermediate dropping to roughly $81.30. The decline followed six consecutive sessions of gains driven by Middle East tensions. Investors weighed weaker global demand forecasts and rising US crude inventories against ongoing uncertainty in the region.
Although shipping through the Strait of Hormuz remains well below normal levels and negotiations between Washington and Tehran appear stalled, the pullback in oil helped improve risk appetite across equity markets. Lower energy costs are seen as supportive for inflation and corporate margins.
Earnings moves: Cisco, Cerebras, Dell, HP, and more
Corporate earnings continued to drive individual stock moves as the reporting season winds down. Cisco Systems fell 9.2% despite forecasting fiscal 2027 revenue above Wall Street expectations, as investors focused on other aspects of its quarterly update. AI chip designer Cerebras dropped more than 13% after reporting quarterly revenue below analyst estimates, giving back part of its recent rally.
PC makers Dell Technologies and HP gained after Lenovo reported stronger-than-expected quarterly results, lifting sentiment across the personal computer industry. Meanwhile, insurance marketplace Accelerant surged nearly 44% after private equity firm Thoma Bravo agreed to acquire the company in an all-cash deal valued at over $4 billion. Luxury accessories company Tapestry fell almost 16% despite issuing an upbeat annual earnings outlook.
With more than 430 S&P 500 companies having already reported, the earnings season is largely behind us. Investor attention is now shifting to upcoming economic data and Fed policy expectations, as markets assess the path for interest rates and corporate growth in the second half of the year.
For more on how inflation data and oil prices are influencing market sentiment, see our coverage of Dow's recent surge on strong earnings and falling oil and the mixed futures ahead of the Fed decision.
This article is for informational purposes only and does not constitute financial advice.
