Stock Market Opens Lower on Higher Wholesale Inflation Report

by Warren Seah

The stock market in the United States opened on Friday with a downward trend as the latest wholesale inflation report exceeded expectations. This has raised concerns that the Federal Reserve might need to further increase interest rates to combat inflation.

Market Performance

  • The Dow Jones Industrial Average (DJIA) declined by 72 points or 0.2% to reach 35,104.
  • The S&P 500 (SPX) experienced a 0.5% loss.
  • The Nasdaq Composite (COMP) dropped 0.8%.

Wholesale Inflation

According to the Labor Department, the U.S. producer price index rose by 0.3% in July. This is an increase from a previously reported flat reading in June and marks the largest gain since January. The core producer price index, excluding prices of volatile food, energy, and trade services, rose 0.2% in July compared to a 0.1% advance in the previous month.

Yield on Treasury Note

The yield on the 2-year Treasury note (TMUBMUSD02Y) climbed by 2 basis points to 4.88% on Friday morning. This increase reflects the impact of the wholesale inflation report on market sentiment.

Weekly Performance

As the week nears its end, the S&P 500 is expected to record a decline of 0.6%, while the Nasdaq has already fallen by 1.9%. In contrast, the Dow industrials managed to secure a slight weekly gain of 0.1%, according to FactSet data.

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