U.S. stocks fall as 5.4% producer inflation and $100 oil revive Fed fears

  • U.S. stocks opened lower Thursday as inflation and oil prices increased rate-hike concerns.
  • 5.4% annual producer inflation accelerated from 4.8% in July, while Brent remained above $100.
  • Markets awaited Friday’s CPI report after pricing roughly a 62% chance of a September hike.

U.S. stocks opened lower Thursday after August producer inflation accelerated to 5.4% annually from 4.8% in July, while Brent crude stayed above $100 a barrel. The S&P 500 fell 0.55% to 7,594.74, the Nasdaq Composite dropped 0.88% to 26,021.05 and the Dow Jones Industrial Average slipped 0.17% to 52,291.85. Higher inflation and bond yields tend to weigh more heavily on high-valuation growth stocks because future earnings are discounted more sharply, leaving AI and semiconductor shares particularly exposed. Markets were pricing roughly a 62% chance of a 25-basis-point Federal Reserve rate increase at the September meeting before the PPI report, with Reuters later putting the probability near 65%. Friday’s CPI report is the next major test: economists polled by Reuters expect headline inflation of 0.4% monthly and 3.4% annually, with core CPI at 0.2% monthly and 2.4% annually. Reuters technical analysis identified S&P 500 support around 7,620 to 7,577 and resistance near 7,756 to 7,771.

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