Stocks Rise Toward Record as Price Pressures Ease: Markets Wrap
(Bloomberg) — Wall Street traders drove stocks higher and bond yields fell as more evidence of moderating inflation reinforced bets the Federal Reserve will refrain from raising interest rates next month.
A back-to-back advance in equities drove the S&P 500 toward a record, though the gauge pared gains as a decline in oil waned. The Nasdaq 100 rose about 1%. Treasury two-year yields, which are more sensitive to imminent Fed moves, dropped six basis points to 4.14%. Money markets priced in less than a 40% chance of a September Fed hike, from roughly 50% earlier this week.
US wholesale inflation decelerated in July by more than estimated as energy and food costs fell. The producer price index rose 4.7% from July 2025 after a 5.5% annual increase in June. On a month-over-month basis, the PPI was unchanged.
The report showed that inflation, while still way above the Fed’s 2% target, is showing signs of stabilization following the oil-driven surge since the Iran war began earlier this year, according to Glen Smith at GDS Wealth Management.
“This is good news for consumers and the Federal Reserve, which is walking an extremely tight line between trying to tame inflation, while monitoring a softening labor market,” he said.
The figures may give the Fed more room to weigh inflation pressures against a recent slowdown in hiring as it debates whether to lift borrowing costs in September. Officials will see additional reports before the meeting, and investors will be listening closely to Chairman Kevin Warsh’s expected remarks at the annual Jackson Hole symposium later this month.
“The Fed still has an inflation problem, but the recent softness likely strengthens the case for doves on the committee who want to wait things out,” said Sonu Varghese at Carson Group.
Inflation running above the Fed’s target and swelling budget deficits have contributed to elevated long-dated yields. The US government is about to sell 30-year bonds at the highest rate in a quarter of a century, after a historic selloff that has stirred speculation the nation will tilt borrowing further toward short-dated maturities.
Fed Bank of Richmond President Tom Barkin laid out an argument to hold rates steady in light of signs that inflation is declining, but also acknowledged the risk that some price pressures could become embedded, eventually forcing officials to tighten policy.
His Cleveland counterpart Beth Hammack questioned whether recent signs of a slowdown in inflation will continue and reiterated her call to raise rates now.
Corporate Highlights:
Cisco Systems Inc. projected $7.5 billion in sales tied to the AI data center boom this fiscal year, disappointing investors who’ve seen the world’s largest networking gear supplier amass $9.3 billion in artificial intelligence-related orders over the past year. Cerebras Systems Inc. projected slower growth than some investors anticipated, a sign the company is still in the early stages of popularizing a novel chip design. Advanced Micro Devices Inc. is planning to raise as much $5 billion in what would be the chipmaker’s biggest-ever US dollar investment-grade bond sale, adding to a wave of debt tied to the AI boom. Databricks Inc. has secured $5 billion in funding at a valuation of $190 billion, the second round of financing this year for a fast-growing software firm that competes with Snowflake Inc. and Alphabet Inc. OpenAI is naming its second new chief revenue officer in less than a year, a sign of efforts to bolster sales growth ahead of a highly anticipated Wall Street debut. What Bloomberg Strategists say…
“The US stock market has all the ingredients to rally another 10% in the coming months, as profit projections are rising faster than share prices can keep up.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.4% as of 12 p.m. New York time The Nasdaq 100 rose 0.9% The Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 was little changed The MSCI World Index rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1530 The British pound was little changed at $1.3496 The Japanese yen was little changed at 159.36 per dollar Cryptocurrencies
Bitcoin fell 0.3% to $63,381.87 Ether fell 0.3% to $1,879.19 Bonds
The yield on 10-year Treasuries declined five basis points to 4.64% Germany’s 10-year yield declined three basis points to 3.13% Britain’s 10-year yield declined two basis points to 4.95% Commodities
West Texas Intermediate crude fell 0.8% to $82.63 a barrel Spot gold fell 1% to $4,364.66 an ounce ©2026 Bloomberg L.P.
