STORY: Stocks struggled on Thursday despite fresh evidence of cooling inflation... as investors, at first relieved, came around to the view that while price pressures are easing, the Federal Reserve still needs to aggressively boost interest rates to fully tame rising prices.
The S&P closed a tad lower after earlier hitting fresh three-month highs following data that showed the U.S. producer price index unexpectedly fell in July.
But policy-makers have left little doubt they will tighten monetary policy until inflation pressures fully abate.
Michael Vogelzang is Chief Investment Officer of CAPTRUST.
“I think 50 basis points is as good a bet as any at the moment for September. And the Fed has already said they're going to be data dependent and watch and wait and see what happens for the next couple of meetings during the year. So, you know, it wouldn't surprise us if we get to another 100 or 120, 550 basis points, even by the beginning of 2023. But that's going to be somewhat data dependent. But again, we think inflation's going to be harder to cure rather than softer or easier to cure. And as a result, the Fed's bias is still tight. And that's going to eventually that's going to weigh back on this market.”
The Dow closed roughly flat, same with the S&P, and the Nasdaq dropped a little over half a percent.
In earnings-driven news, Walt Disney jumped 4.7% as the media giant edged past rival Netflix with 221 million streaming customers and announced it will increase prices for customers who want to watch Disney+ or Hulu without commercials.
Online dating site Bumble fell 8.6% after cutting its full-year revenue forecast as it grapples with competition from rival Match Group.