[New York Stock Market Briefing] Flat Despite PPI Shock Due to Bargain Buying…Intel Soars Over 7%

New York Stock Market Briefing

The three major New York stock indices closed flat. Although the July U.S. Producer Price Index (PPI) surged far above expectations, the influx of bargain buying helped maintain the indices in a flat range.

On the 14th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (DJIA) closed at 44,911.26, down 11.01 points (0.02%) from the previous session. The S&P 500 Index ended at 6,468.54, up 1.96 points (0.03%), while the NASDAQ Composite Index closed at 21,710.67, down 2.47 points (0.01%).

According to the U.S. Department of Labor, the July PPI, seasonally adjusted, jumped 0.9% from the previous month. This is the steepest increase since June 2022, which also saw a 0.9% rise. The gain widely exceeded the market forecast of a 0.2% increase.

The core PPI, excluding food and energy, also rose by 0.9%, similarly outpacing the market expectation (0.2%). On a year-over-year basis, the overall PPI increased by 3.3%, and core PPI rose by 3.7%.

However, markets held steady as it became evident that much of the headline figure was driven by a sharp rise in portfolio management fees and airline fares.

Portfolio management fees rose by 5.8%, and airline fares increased by 1%. The rise in portfolio management prices was attributed to the robust performance of the financial markets overall.

Nevertheless, despite this resilience, there is a growing perception that tariff-driven inflation will inevitably be passed on to consumers.

The July PPI data have also dampened rate cut expectations. Market speculation about a 'big cut' (50bp rate cut) by the Federal Reserve (Fed) in September has faded.

According to the CME FedWatch Tool at the Chicago Mercantile Exchange (CME), the federal funds futures market reflected a 92.6% probability of a 25bp rate cut in September. The probability of a 50bp cut has vanished, and the chance of holding rates steady is at 7.4%.

By stock, the giant tech firms with market capitalizations over $1 trillion—all rose except Apple and Tesla. Amazon climbed 2.86%.

Intel soared 7.38% on reports that the Trump Administration is considering holding a stake in the company.

Min-Kyung Shin, Hankyung.com reporter radio@hankyung.com