U.S. Stocks See Divergent Results on Wednesday

(MENAFN) U.S. equities concluded trading on Wednesday with a split performance following the release of weaker-than-anticipated wholesale inflation data. The S&P 500 achieved a new all-time high, while the Dow Jones Industrial Average finished in negative territory.

The Dow Jones Industrial Average dropped by 220.42 points, or 0.48%, to 45,490.92. In contrast, the S&P 500 gained 19.43 points, a 0.30% rise, closing at a record 6,532.04. The Nasdaq Composite Index advanced marginally by 6.57 points, or 0.03%, to 21,886.06, after briefly hitting an intraday record earlier in the session.

Sector performance within the S&P 500 was uneven, with six of the eleven major sectors experiencing declines. The consumer discretionary and consumer staples sectors were the weakest, falling 1.58% and 1.06%, respectively. Leading the gains were the energy and technology sectors, both climbing 1.76%.

The Bureau of Labor Statistics reported that the Producer Price Index (PPI) in the United States decreased by 0.1% in August. This figure sharply contrasted with the previous month’s downwardly revised 0.7% increase and fell short of the 0.3% rise analysts had forecast. On a year-over-year basis, the headline PPI was up 2.6%.

The core PPI, which excludes volatile food and energy costs, also saw a 0.1% decline, defying predictions of a 0.3% gain. Excluding food, energy, and trade services, the index rose by 0.3% in August and was up 2.8% from a year ago.

Following the softer inflation report, market participants are now fully anticipating at least a quarter-point interest rate cut by the Federal Reserve, according to the CME FedWatch tool, with increased speculation of a more significant half-point reduction.

"With the PPI surprising to the downside, with the employment data showing much greater softness than anticipated, that basically says that there could be a reason for the Fed to cut by 50 basis points," CFRA Research’s Sam Stovall told media. "What they want to do is to ensure that they are not going to be too slow, as the president describes Fed Chair Powell, and that they do at least keep up with or get ahead of the overall weakening trend."

The U.S. 10-year Treasury note yield fell to a five-month low of 4.04% just before the PPI release, a move attributed to heightened expectations of imminent rate cuts.

In corporate news, shares of Oracle soared by more than one-third after the company raised its financial outlook, driven by robust demand for artificial intelligence. This came amid reports from The Wall Street Journal of a massive $300 billion cloud computing agreement with OpenAI. AI-related stocks also saw significant gains, with Broadcom jumping 9.77%, Nvidia rising 3.85%, and Advanced Micro Devices adding 2.39%.

MENAFN11092025000045017169ID1110046786