US benchmark equity indexes experienced declines on Thursday as official data indicated that producer prices surged beyond Wall Street's expectations for November. The Nasdaq Composite fell 0.7% to 19,902.8 after previously closing above 20,000 for the first time on Wednesday. The Dow Jones Industrial Average decreased 0.5% to 43,914.1, while the S&P 500 also declined 0.5% to 6,051.3.
The sectors of consumer discretionary and health care were among those that led the downturn, with only consumer staples registering gains. Recent economic reports showed that the US producer price index rose, particularly because wholesale costs for goods increased due to a jump in the food component, as reported by the Bureau of Labor Statistics.
Year over year, producer prices climbed 3% in November, exceeding the anticipated 2.6% growth among analysts. This report still backs the prospect of an additional 25-basis-point cut in interest rates by the Federal Reserve next week, as stated by Oxford Economics. On Wednesday, the government reported that consumer inflation in the US accelerated in accordance with market expectations last month, both on a sequential and annual basis. Markets are generally anticipating that the Federal Open Market Committee will announce a quarter-percentage-point rate cut on Wednesday, according to insights from the CME FedWatch tool. Additionally, weekly applications for unemployment insurance unexpectedly rose, with continuing claims exceeding prior projections, as reported by the US Department of Labor. In the bond market, the US 10-year yield increased by 6.3 basis points to 4.33%, while the two-year rate rose by 4.2 points to 4.2%. In company news, shares of Adobe ($ADBE) plummeted 14%, marking the largest decline on both the S&P and Nasdaq.
Late Wednesday, the software company projected a fiscal 2025 outlook that fell short of market expectations, despite Q4 results that surpassed views. Nordson ($NDSN) shares experienced a drop of more than 8%, the second-largest decline on the S&P, as the precision technology company presented a pessimistic fiscal Q1 outlook while exceeding market projections for Q4 results. Warner Bros.
Discovery ($WBD) announced a new corporate structure designed to unlock additional shareholder value in light of an ‘evolving media landscape.’ Following the announcement, the media and entertainment giant's stock surged 15%, making it the top gainer on both the S&P and Nasdaq. In contrast, Boeing ($BA) saw its stock gain 1.1%, positioning it as the third-largest increase on the Dow, as the plane manufacturer plans to invest $1 billion to upgrade its facility located in Charleston County, South Carolina. In the commodities market, West Texas Intermediate crude oil fell 0.2% to $70.16 per barrel.
The International Energy Agency raised its 2025 global oil demand outlook, asserting that the market is expected to remain 'comfortably supplied' even as key producing nations decided to extend their output cuts. On Wednesday, the Organization of the Petroleum Exporting Countries reduced its global oil demand forecasts for 2024 and 2025 for the fifth consecutive month.
Gold experienced a drop of 1.9% to $2,704.60 per troy ounce, while silver fell by 4.3% to $31.57 per ounce..