US Stocks Fall 0.55% as Producer Inflation and Oil Above $100 Push Fed Rate Hike Expectations to 70%
Major US indices opened lower following hotter-than-expected August producer prices, while crude oil climbed past $100 per barrel due to Middle East tensions.
The Dow Jones Industrial Average fell 88.8 points at the open on Thursday, closing the previous day at 52291.85. The S&P 500 dropped 41.6 points to reach an opening level of 7594.74, and the Nasdaq Composite lost 232.3 points to hit 26021.052. This decline followed August producer price data showing a 0.4% increase in wholesale costs, which revised the annual PPI level to 5.4%. Market participants now estimate a 70% probability of a Federal Reserve interest rate hike next week based on CME Group pricing. Additionally, escalating tensions with Iran pushed U.S. crude oil prices up 4% to just over $100 per barrel. Jeffrey Roach, chief economist at LPL Financial, noted that the prolonged conflict has entrenched inflation pressures.
