Stocks struggled for direction on Thursday as investors mulled another better-than-expected inflation report.
The S&P 500 closed down 0.07% at 4,207.27, while the Nasdaq Composite slumped 0.58% to end the day at 12,779.91. The Dow nudged upward by 27.16 points, or 0.08%, to finish at 33,336.67. The three major averages opened the session higher but lost steam as the day progressed.
Investors received more good economic news when the July producer price index showed a surprise decline from June. PPI dropped 0.5%, compared with an estimate of a 0.2% gain, according to a Dow Jones survey. The PPI reading excluding food and energy rose less than expected.
That reading follows an encouraging consumer price index for July on Wednesday. CPI came in at 8.5%, slightly cooler than the 8.7% expected by analysts surveyed by Dow Jones and a slowing pace from the prior month.
Stocks rallied after Wednesday’s report and again Thursday morning, but the uptrend waned later in the day.
“Investors, while they’re relieved that inflation is declining, it doesn’t change the fact that Federal Reserve will continue to be hiking rates. … I’m not quite sure at this juncture that people want to give the all-clear sign, but I do think sentiment is much better than it was, say, 60 days ago,” said Wayne Wicker, chief investment officer at MissionSquare Retirement.
One bright spot for markets was Disney. The stock jumped more than 4% after the media giant posted stronger-than-anticipated subscriber numbers for the last quarter, along with earnings and revenue that topped expectations. Disney also said it would raise prices for Disney+.