Global stocks edged lower on Thursday, with the S&P 500 ending flat at a fresh record closing high, while US Treasury yields rose after market expectations for Federal Reserve interest rate cuts were shaken by strong inflation data.
The benchmark S&P 500 rose 0.03% to set a new record high, while the Dow Jones Industrial Average and Nasdaq Composite finished little changed. However, US Treasury yields leaped as investors shifted their focus from Fed rate cut expectations to inflation concerns.
US producer prices rose 0.9% in July, surpassing consensus forecasts for a 0.2% gain, sparking concerns about inflation pressures. The Labor Department reported the data on Wednesday, shaking market confidence in Fed rate cuts. Despite this, many investors still expect the Fed to reduce borrowing costs next month.
Market analysts remain divided on the impact of the inflation data. Some, like Genter Capital Management CEO Dan Genter, believe that the market is already accepting a slowing economy and see confirmation from the inflation numbers as support for expected 25-basis-point rate cuts. Others, such as Peter Andersen of Andersen Capital Management, are more cautious, citing the need for wholesale data to confirm the presence of inflation.
The dollar rose against major peers after falling in the prior session, while oil prices settled higher ahead of Friday’s US-Russia summit. Global investors now predict 70% stagflation will become the dominant market narrative within three months, according to a Bank of America survey.
Source: https://www.reuters.com/world/china/global-markets-global-markets-2025-08-14