Nasdaq Rises 0.6% as Soft PPI, Big Tech Rally Lift Wall Street

Apple Hits Record High; Amazon Jumps 3%

Cooling wholesale inflation lifted investor sentiment on Wall Street. US producer prices for June came in below market expectations, sending the probability of a Federal Reserve rate increase later this month down to the low teens from 31% a week earlier. A rotation out of artificial-intelligence chip stocks and into megacap technology shares also helped drive all three major US stock indexes higher.

On July 15, the Dow Jones Industrial Average closed up 0.29% at 52,658.64. The S&P 500 rose 0.38% to 7,572.40, while the tech-heavy Nasdaq Composite gained 0.62% to 26,269.23.

US stocks drew buyers after a second straight day of easing inflation data. The Labor Department said the June producer price index, or PPI, fell 0.3% from the previous month, undershooting economists' forecasts for no change. It was the first month-on-month decline since August last year, when the index slipped 0.2%, and the steepest drop since April last year, when it also fell 0.3%. Producer prices, often referred to as wholesale inflation, are viewed as a leading indicator for consumer prices because they tend to feed through to final goods with a lag.

Bloomberg said the latest PPI data reflected stable energy prices during the US-Iran ceasefire period. Markets took that as a sign the Fed has room to hold rates steady for now even if Middle East tensions flare again. Interest-rate futures still priced in one increase this year, but the expected timing shifted to December.

Remarks from Fed officials also added to hopes for less policy tightening. John Williams, president of the Federal Reserve Bank of New York, said in a speech that inflation has peaked and is expected to move lower. CME FedWatch showed the probability of a benchmark rate increase at the Fed's July 28-29 policy meeting fell to 10.2% on July 15 from 31.0% on July 8.

Fed Chair Kevin Warsh told the Senate Banking Committee that President Donald Trump had not interfered with the central bank's independence and that any such attempt would fail, easing market concerns.

Among individual stocks, Apple climbed 4% to a record high. Amazon, Alphabet and Microsoft also rose about 3%, helping lift the broader market. AI chip shares, which had rallied sharply in recent sessions, faced profit-taking. Micron fell 8%, Intel dropped 4.7%, and AMD and Lam Research each lost about 3%. The VanEck Semiconductor ETF (SMH) fell more than 1%, while the Philadelphia Semiconductor Index dropped 2.1%. Investors cut exposure to semiconductor leaders and rotated into megacap technology stocks.

Corporate earnings also supported the market. BlackRock rose 6.6% after posting results that beat expectations. Morgan Stanley added just 0.4% despite strong earnings. PayPal surged 17.2% after Reuters reported that Stripe and private-equity firm Advent International were pursuing a joint acquisition.

Still, the Middle East remains a key market variable. Oil prices are rising again as fighting between the US and Iran resumes. Bloomberg said the latest PPI reading gave policymakers room to avoid the mistake of raising rates too quickly in response to a supply shock.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com