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S&P 500 and Nasdaq rise amid further signs of inflation cooling

U.S. stocks rose on Thursday as investors digested new inflation and jobs data that tested high expectations for a quarter-percentage point interest rate cut next week.

The S&P 500 (^GSPC) rose 0.3%, while the Nasdaq Composite (^IXIC) gained 0.5%, coming off strong closing gains fueled by a rally in technology stocks. The Dow Jones Industrial Average (^DJI) was little changed.

The market is recovering after a whirlwind ride on Wednesday as renewed enthusiasm for technology stocks pulled stocks out of a trough that came as recent consumer inflation readings dashed hopes of a 0.5% rate cut by the Federal Reserve.

Read more: Fed forecasts for 2024: What experts say about the possibility of a rate cut

Before the stock market opened, the producer price index for August provided an indication that inflationary pressures are easing sufficiently for the Fed to begin cutting interest rates.

Wholesale prices rose by 0.2 percent compared to the previous month, slightly above economists' expectations. On an annual basis, the producer price index (PPI) rose by 1.7 percent as expected, while the figure for July was revised downwards.

Meanwhile, data showed that initial jobless claims rose more than expected to 230,000 last week, up 2,000 from the previous week. The probability of a 25 basis point cut rose to 87% after the reports, up from 50% just a few days ago.

At the corporate level, Moderna (MRNA) shares fell 17% after the biotech giant cut its 2025 revenue forecast. The company also announced it would cut its annual R&D budget by about $1.1 billion through 2027.

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  • Stock prices stable in light of further inflation data and higher than expected unemployment figures

    Stock prices were little changed on Thursday as investors digested a series of new data that could provide clues about how much the Federal Reserve will cut interest rates at its meeting this month.

    The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) were flat, posting strong closing gains on a rally in technology stocks. The Dow Jones Industrial Average (^DJI) was also nearly flat.

    As for inflation data, the producer price index rose 0.2% month-on-month in August, slightly higher than economists had expected. The producer price index for July, meanwhile, was revised downwards. Year-on-year, wholesale prices rose 1.7%, as expected.

    Weekly initial jobless claims rose 2,000 to 230,000, higher than economists expected.

    Investors are watching the data closely as the Federal Reserve prepares for its meeting next week. Markets have generally expected a rate cut, but what is unknown is how big that cut will be.

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