Stocks Slip, Bitcoin Plunges On Inflation Spike: What's Moving Markets Thursday?

Wall Street struggled to extend record highs on Thursday, as investors opted to lock in profits and adopt a more cautious stance after U.S. producer inflation posted its largest increase in three years.

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The headline Producer Price Index (PPI) jumped 0.9% in July, the steepest monthly gain since June 2022, lifting the annual rate to 3.3%. Both figures far exceeded economists' forecasts of 0.2% and 2.9%, respectively.

The surge wasn't driven by volatile components such as energy or food. Core PPI, which excludes both, also spiked 0.9% on the month, the sharpest rise since March 2022, pushing the annual rate to 3.7%.

Traders still assign a 90% probability to a 25-basis-point Federal Reserve rate cut in September, but the odds are narrowing. Upcoming inflation and labor market data are expected to be decisive.

Despite the inflation surprise, stocks slipped only ...