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U.S. stocks are mixed after higher-than-expected producer price reading for July

Published 08/10/2023, 06:52 PM
Updated 08/11/2023, 11:18 AM
© Reuters

Investing.com -- U.S. stocks were mixed after producer price data, another reading on inflation, came in higher than expected.

By 11:08 ET (15:08 GMT), the Dow Jones Industrial Average was up 76 points or 0.2%, while the S&P 500 was down 0.2% and the NASDAQ Composite was down 0.6%.

The main equities indices closed marginally higher Thursday, as initial enthusiasm after the July report on consumer prices waned.

July producer prices due

The producer price index was higher than expected on a headline and core basis. Over the year, PPI rose 0.8%, a tad higher than the expected 0.7%. On a monthly basis, PPI rose 0.3%, versus expectations for 0.2%. Core PPI rose 2.4% for the year, also higher than expected.

The report was contrary to Thursday's U.S. consumer price index, which showed that annual headline inflation in the world's largest economy rose by less than expected in July, bolstering projections that the Federal Reserve may soon back away from its long-running campaign of interest rate hikes.

However, with inflation remaining well above the Fed’s medium-term target, markets trimmed their expectations for a rate cut this year, with rates expected to remain at 22-year highs.

Additionally, the University of Michigan's consumer sentiment reading came in slightly better than expected at 71.2.

Six Flags on a ride

The amusement park operator Six Flags Entertainment New (NYSE:SIX) was falling 2.7% after it missed expectations for earnings.

Maxeon Solar Technologies Ltd (NASDAQ:MAXN) was down 32% on signs demand is slipping, as quarterly earnings missed revenue guidance. The clean energy company said high interest rates were a factor.

Crude remains supported by tight supplies

Oil prices edged higher Friday, trading near their highest levels since January, underpinned by tightening global supply.

The International Energy Agency said demand growth for oil next year will be slower than previously forecast, citing lackluster macroeconomic conditions, but warned global inventories could draw down sharply over the rest of 2023, potentially driving prices still higher.

The Organization of the Petroleum Exporting Countries said on Thursday that it still expects world oil demand to rise by 2.25 million barrels per day in 2024, compared with growth of 2.44 million barrels per day this year.

(Peter Nurse and Oliver Gray contributed to this report.)

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