Stocks, Bonds Gain After Soft PPI Cools Fed Hike Bets
U.S. stocks and Treasuries rose after core PPI came in below expectations, reducing fears of near-term Fed rate hikes. The S&P 500 gained 0.4% while oil prices remained above $80 on geopolitical tensions.
US equities and Treasuries rallied on Wednesday after softer-than-expected producer price data eased concerns over imminent Federal Reserve tightening. Core PPI rose 4.7% year-over-year, missing forecasts, helped by lower energy costs. Money markets still price in one rate hike this year, but not before December.
Fed Chair Kevin Warsh stated that President Trump has not tried to influence monetary policy, reaffirming the central bank's independence. The Fed's Beige Book reported U.S. economic activity expanding at a slight to moderate pace, with modest price increases linked to the Middle East conflict and tariffs.
Oil prices stayed elevated, with WTI above $80 a barrel as tensions between the U.S. and Iran threaten shipping through the Strait of Hormuz. In corporate news:
- Apple received approval for Apple Intelligence in China.
- Anthropic is preparing for a potential IPO.
- BlackRock reached a record $15.3 trillion in assets.
- PayPal is reviewing strategic options amid reported takeover interest.
Source: First Squawk