US benchmark equity indexes experienced a downturn on Thursday as official data revealed that producer prices surged beyond Wall Street's forecasts in November. The Nasdaq Composite declined by 0.7%, ending at 19,902.8 after previously closing above 20,000 for the first time on Wednesday. Similarly, both the Dow Jones Industrial Average and the S&P 500 fell by 0.5%, finishing at 43,914.1 and 6,051.3, respectively.
Excluding consumer staples, all sectors registered declines, with consumer discretionary and health care leading the downturn. In economic insights, the US producer price index escalated by 0.4% last month, prompted by rising wholesale costs of goods, particularly due to a significant increase in the food component, as reported by the Bureau of Labor Statistics (BLS).
On a year-over-year basis, producer prices rose by 3% in November, surpassing the 2.6% increase analysts anticipated. Despite the headline PPI exceeding expectations, the nuances of the report indicate potential support for a 25-basis-point interest rate cut from the Federal Reserve next week, as indicated by Oxford Economics. Additionally, on Wednesday, the BLS shared insights that US consumer inflation matched market estimates last month, both sequentially and annually. The markets are largely anticipating that the Federal Open Market Committee of the central bank will implement a quarter-percentage-point rate cut next Wednesday, according to the CME FedWatch tool. In labor updates, weekly applications for unemployment insurance saw an unexpected increase, while continuing claims rose more than anticipated, per the US Department of Labor. The US 10-year yield increased by 6.3 basis points to 4.33%, while the two-year rate rose by four basis points to reach 4.2%. In corporate news, shares of Adobe ($ADBE) plummeted nearly 14%, marking it as the worst performer on both the S&P 500 and the Nasdaq.
This decline followed the software maker's fiscal 2025 outlook, which fell short of market expectations, despite reporting better-than-expected fourth-quarter results. Nordson ($NDSN) also faced challenges, experiencing an 8.2% drop, making it the second-worst performer on the S&P 500. The precision technology company reported a gloomy fiscal first-quarter outlook, although its results for the prior quarter exceeded market forecasts. In contrast, Warner Bros.
Discovery ($WBD) revealed a new corporate structure aimed at enhancing shareholder value amid an evolving media landscape, leading to a remarkable 15% surge in its share price, making it the top gainer on the S&P 500 and Nasdaq. Boeing ($BA) found favor among investors, with shares rising 1.1% after announcing a significant $1 billion investment to upgrade its facility in Charleston County, South Carolina. Crude oil prices for West Texas Intermediate dipped by 0.3%, settling at $70.05 a barrel. The International Energy Agency projected an increase in the 2025 global oil demand outlook, advising that the market should remain comfortably supplied, despite key oil-producing nations’ decision to extend output cuts. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) cut its projections for global oil demand in 2024 and 2025 for the fifth consecutive month. Gold prices fell by 1.8% to $2,706.50 per troy ounce, while silver experienced a decline of 4.2%, concluding at $31.59 per ounce..