U.S. benchmark equity indexes experienced a dip during intraday trading as market participants evaluated the latest producer prices report. The Dow Jones Industrial Average and S&P 500 both fell by 0.3%, landing at 43,819 and 5,969.4, respectively, following midday activities on Thursday. Meanwhile, the Nasdaq Composite declined by 0.2% to reach 19,194.7.
Among various sectors, industrials reported the most significant decrease while the technology sector emerged as the leader in gains. In recent economic updates, U.S. producer price growth saw an acceleration in October, rebounding due to increased wholesale costs of goods, as reported by the Bureau of Labor Statistics (BLS).
Data from BLS indicated that U.S. consumer inflation rose in alignment with market expectations last month. "The details from the consumer price index and PPI reports this week signal that prices rose at a faster pace in October, but the details don't point to accelerating inflation," expressed Oxford Economics. The likelihood of policymakers reducing the benchmark lending rate by 25 basis points in the upcoming month decreased to 75% on Thursday, a drop from 83% the day before, based on insights from the CME FedWatch tool.
Concurrently, the probability for interest rates remaining steady went up to 25%. During intraday trading, the U.S. 10-year yield saw a decline of 4.3 basis points, resting at 4.41%, while the two-year yield showed little movement, holding at 4.28%. Federal Reserve Chair Jerome Powell is set to address the public at 3 PM ET.
Fed Governor Adriana Kugler highlighted the necessity for policymakers to remain cognizant of both facets of their mandate amidst a "continued but slowing trend in disinflation and cooling labor markets." Kugler commented, "If any risks arise that stall progress or reaccelerate inflation, it would be appropriate to pause our policy rate cuts.
If the labor market slows down suddenly, it would be appropriate to continue to gradually reduce the policy rate." Last week, the Federal Open Market Committee of the central bank made a 25-basis-point reduction in rates, following a more considerable 50-basis-point cut in September. In commodity news, West Texas Intermediate crude oil settled at $68.21 a barrel, dipping by 0.3% during intraday trading.
Additionally, the International Energy Agency revised its outlook for global oil demand in 2024 upwards due to a rebound in consumption observed within advanced economies during the third quarter. On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) lowered its estimates for global oil demand in 2024 and 2025 for the fourth consecutive month. In company-specific news, Super Micro Computer ($SMCI) shares plummeted 8.4% intraday, marking the largest drop on the Nasdaq and one of the most significant declines in the S&P 500.
The artificial intelligence server manufacturer stated on Wednesday that it could not submit its quarterly report for the period ending September 30 on schedule. Walt Disney ($DIS) released fiscal fourth-quarter results that surpassed market forecasts on Thursday, driven primarily by growth in its streaming sector.
The media and entertainment heavyweight projected adjusted earnings growth year-over-year for fiscal 2025. Following this news, Disney's shares climbed by 6.1%, making it the top performer on the Dow and among the leading stocks on the S&P 500. In another development, Tapestry ($TPR) has opted to abandon its proposed acquisition of Michael Kors and Versace parent Capri ($CPRI) due to regulatory approval uncertainties.
Following this decision, Tapestry's stock soared by 12%—the best performance on the S&P 500—while Capri's shares increased by 4.1%. Applied Materials ($AMAT) is scheduled to disclose its results after the market closes on Thursday, alongside various other companies. In precious metals, gold prices dropped 0.5%, settling at $2,573.10 per troy ounce, while silver prices fell by 0.4% to $30.55 per ounce..