Stocks Slide as Boeing Drags Dow Softer PPI Reinforces Fed Rate Cut Bets

U.S. stocks slipped at the opening bell Thursday, weighed down by steep losses in Boeing shares following a fatal crash involving a 787 aircraft. Meanwhile, a cooler-than-expected producer price report added to growing expectations that the Federal Reserve could begin cutting interest rates later this year.

The Dow Jones Industrial Average dropped 206 points, or 0.48%, to 42,659. The S&P 500 shed 14 points, or 0.23%, to 6,008, while the Nasdaq Composite slipped 34 points, or 0.18%, to 19,581.

Boeing (NYSE: BA) opened sharply lower, falling 4.57% to $204.23 at 9:32 a.m. ET. The selloff follows a deadly crash involving an Air India-operated Boeing 787-8 that went down shortly after takeoff from Ahmedabad, killing all 242 people on board. The aircraft was nearly 12 years old and marked the first total loss of a Boeing 787 model. The news sent shares down as much as 8% in premarket trading.

The crash adds to a troubling pattern of Boeing-related incidents in recent years, including the 737 MAX disasters and a 2024 door plug failure on an Alaska Airlines flight. Deliveries in 2024 had already plunged by nearly 35% year-over-year, while net orders dropped nearly 60%.

Beyond Boeing, broader market sentiment was influenced by Thursday morning’s release of the May Producer Price Index (PPI), which showed further signs of easing inflation. Headline PPI rose 0.1% month-over-month, below economists’ expectations of a 0.2% gain, while core PPI — which strips out food and energy — also rose just 0.1% compared to the 0.3% forecast.

On a 12-month basis, core final demand rose 3.0%, and the even more narrow “core-core” measure — excluding food, energy, and trade services — decelerated to 2.7%, signaling that wholesale inflation continues to moderate. Combined with yesterday’s softer CPI data, investors now fully price in two Fed rate cuts by year-end, with the first expected as soon as September.

Initial jobless claims also ticked higher, suggesting a labor market that may be cooling alongside inflation. Treasury yields fell sharply on the data, with the 10-year note yield dropping 6.7 basis points to 4.35%, while the dollar extended its recent losses.

As markets digest the dual headlines of a major corporate setback at Boeing and fresh confirmation of slowing inflation, attention now shifts to the Federal Reserve’s decision and updated projections due later today. Although no change in rates is expected at the June meeting, policymakers may hint at a more dovish tilt in response to the latest inflation trends.