Stocks Stall as Hot Inflation Data Lifts Yields and Tempers Fed Cut Bets – US Market Wrap

The blistering run in stocks came to a halt as rising inflation lifted bond yields alongside the dollar, with traders paring bets that the Federal Reserve will cut interest rates next month.

Following a roughly 30% increase from its April lows, the S&P 500 barely moved. While the index moved slightly due to gains in most big techs, more than 350 of its shares fell. Intel Corp. jumped after the Trump administration was said to be considering a stake in the chipmaker.

Two-year Treasury yields rose six basis points to 3.73%. While money markets continue to anticipate at least a half-point of Fed easing in 2025, swaps no longer fully reflect expectations for a quarter-point cut in September. The dollar advanced against all major developed currencies.

US wholesale inflation quickened in July at the fastest pace in three years, signaling that firms are passing on higher import costs tied to tariffs. The producer price index climbed 0.9% on the month and 3.3% from a year earlier, with services costs surging 1.1%.

Although consumer price data earlier this week suggested a softer pass-through in July and labor markets are showing signs of cooling, the Fed is still broadly expected to lower rates next month. Even so, the stronger wholesale inflation figures may prompt some policymakers to reconsider the risks of renewed price pressures.