Stocks Edge Higher as Inflation Cools, Dow Climbs Over 100 Points

U.S. stocks closed modestly higher on Thursday as investors cheered another round of softer-than-expected inflation data, further bolstering expectations for Federal Reserve rate cuts later this year.

The Dow Jones Industrial Average rose 101.85 points, or 0.24%, to 42,967.6. The S&P 500 advanced 23.02 points, or 0.38%, to 6,045.26, while the Nasdaq Composite gained 46.61 points, or 0.24%, ending at 19,662.5. The small-cap Russell 2000 bucked the trend, dipping 0.83 points, or 0.39%, to 212.80.

Thursday's moves came as investors digested the May Producer Price Index (PPI) report, which came in cooler than economists had forecast. Headline PPI increased just 0.1% month-over-month, below the consensus estimate of 0.2%. More notably, the core PPI, which strips out volatile food and energy prices, also rose just 0.1%—half the expected 0.3% gain—while the annual rate slowed to 3.0%.

The data marked the second consecutive soft inflation print following Tuesday’s subdued Consumer Price Index reading. The combination is reinforcing hopes that the Fed could begin cutting rates as soon as September. Futures markets are now pricing in an 80% probability of a rate cut at the Fed’s September meeting, with a second cut pulled forward to October from December.

“The path to easing has clearly become smoother,” analysts commented in an AInvest article published under Jay’s Insight following the PPI release. “May’s PPI report reinforces the narrative that inflation—particularly at the wholesale level—is not reaccelerating”.

Yields fell sharply on the news, with the 10-year Treasury note dropping 6.7 basis points to 4.35%. Gold prices edged higher, and the U.S. dollar continued its recent slide, underscoring investor expectations for looser monetary policy in the months ahead.

On the corporate front, AMD shares closed slightly lower despite an ambitious showcase at its “Advancing AI 2025” event. The chipmaker unveiled new accelerators, systems, and partnerships aimed at challenging Nvidia’s dominance in AI hardware. While AMD’s performance benchmarks impressed, traders appeared focused on the stock’s technical resistance near its 200-day moving average.

Still, the broader tone in equity markets remained upbeat. Cooling inflation and stable economic data appear to be strengthening the case for a “soft landing”—a scenario where inflation recedes without tipping the economy into recession.

With the Federal Reserve’s policy decision due next week, markets will now turn their attention to updated economic projections and the central bank’s “dot plot,” which outlines policymakers' interest rate expectations. As disinflation takes firmer root, Wall Street will be watching closely to see whether the Fed adjusts its guidance.U.S. stocks closed modestly higher on Thursday as investors cheered another round of softer-than-expected inflation data, further bolstering expectations for Federal Reserve rate cuts later this year.

The Dow Jones Industrial Average rose 101.85 points, or 0.24%, to 42,967.6. The S&P 500 advanced 23.02 points, or 0.38%, to 6,045.26, while the Nasdaq Composite gained 46.61 points, or 0.24%, ending at 19,662.5. The small-cap Russell 2000 bucked the trend, dipping 0.83 points, or 0.39%, to 212.80.

Thursday's moves came as investors digested the May Producer Price Index (PPI) report, which came in cooler than economists had forecast. Headline PPI increased just 0.1% month-over-month, below the consensus estimate of 0.2%. More notably, the core PPI, which strips out volatile food and energy prices, also rose just 0.1%—half the expected 0.3% gain—while the annual rate slowed to 3.0%.

The data marked the second consecutive soft inflation print following Tuesday’s subdued Consumer Price Index reading. The combination is reinforcing hopes that the Fed could begin cutting rates as soon as September. Futures markets are now pricing in an 80% probability of a rate cut at the Fed’s September meeting, with a second cut pulled forward to October from December.

“The path to easing has clearly become smoother,” analysts commented in an AInvest article published under Jay’s Insight following the PPI release. “May’s PPI report reinforces the narrative that inflation—particularly at the wholesale level—is not reaccelerating”.

Yields fell sharply on the news, with the 10-year Treasury note dropping 6.7 basis points to 4.35%. Gold prices edged higher, and the U.S. dollar continued its recent slide, underscoring investor expectations for looser monetary policy in the months ahead.

On the corporate front, AMD shares closed slightly lower despite an ambitious showcase at its “Advancing AI 2025” event. The chipmaker unveiled new accelerators, systems, and partnerships aimed at challenging Nvidia’s dominance in AI hardware. While AMD’s performance benchmarks impressed, traders appeared focused on the stock’s technical resistance near its 200-day moving average.

Still, the broader tone in equity markets remained upbeat. Cooling inflation and stable economic data appear to be strengthening the case for a “soft landing”—a scenario where inflation recedes without tipping the economy into recession.

With the Federal Reserve’s policy decision due next week, markets will now turn their attention to updated economic projections and the central bank’s “dot plot,” which outlines policymakers' interest rate expectations. As disinflation takes firmer root, Wall Street will be watching closely to see whether the Fed adjusts its guidance.

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