Stocks opened and closed in positive territory, though the path to the finish line was choppy. A mixed reading on wholesale inflation pressured the main benchmarks throughout the morning, but a rally in several mega-cap stocks lifted them higher in afternoon trading.
Ahead of the open, the Bureau of Labor Statistics said the Producer Price Index (PPI), which measures what businesses are paying suppliers for goods, increased 0.2% month-over-month in August. Year-over-year, headline PPI was up 1.7% – the slowest pace since February.
Core PPI, which excludes food, energy and trade services, was up 0.3% on a monthly basis and 3.3% year-over-year. While the July-to-August increase matched what was seen the month prior, the annual rise was slightly higher.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Wholesale price growth slowed last month, and today's data is unlikely to impact the Fed's near-sure decision next week," says NerdWallet Senior Economist Elizabeth Renter. "A modest rate cut is all but certain, and consumers and businesses alike will welcome it with open arms."
According to CME Group's FedWatch Tool, futures traders are pricing in a 67% probability the Fed will cut rates by a quarter-percentage point next Wednesday. Odds of a half-percentage point cut are currently at 33%.
Microsoft moves on another round of job cuts
In single-stock news, Microsoft (MSFT) rose 0.9% after a leaked internal memo indicated that the technology giant is eliminating another 650 positions in its Xbox gaming unit. This marks the third round of layoffs in the division since Microsoft bought video game maker Activision Blizzard in 2023.
Fellow Magnificent 7 stocks Alphabet (GOOGL, +2.3%) and Meta Platforms (META, +2.7%) also drew attention Thursday after a report from Janus Henderson Global Dividend Index showed U.S. dividend payouts were up 8.6% in the second quarter. The two mega-cap communication services stocks "made a significant contribution to this growth, boosting the U.S. underlying total by 3.6 percentage points," the report indicated.
Moderna plunges after cutting R&D spending
Elsewhere, Moderna (MRNA) plunged 12.4% – making it the worst S&P 500 stock today – after the COVID-19 vaccine maker slashed its research and development budget to focus on new product approvals. The company also provided its 2025 revenue outlook, which came in below analysts' expectations.
The healthcare stock is now down nearly 30% for the year to date, but there are plenty of bulls to be found. Indeed, Argus Research analyst Jasper Hellweg (Buy) has a Buy rating on MRNA and says this technical weakness creates a buying opportunity.
Micron sinks after double downgrade
Micron Technology (MU) was another notable decliner, sinking 3.8% after Exane BNP Paribas analyst Karl Ackerman issued a rare double downgrade on the semiconductor stock, to Underperform from Outperform (the equivalents of Sell and Buy, respectively).
Ackerman expects MU to underperform its artificial intelligence (AI) peers over the next year or so amid "an oversupply of high bandwidth memory" chips, which he believes will lead "to a faster-than-expected correction in DRAM selling prices."
Shares of the memory chipmaker had a red-hot start to 2024 and had more than doubled in value on a year-to-date basis as of mid-June. Since then, though, MU stock has plunged 43% on uncertainty around artificial intelligence (AI) spending.
Ackerman also cut his price target on Micron, to $67 from $73. For reference, MU closed today at $87.21.
As for the major indexes, the Dow Jones Industrial Average rose 0.6% to 41,096, the S&P 500 added 0.8% to 5,595, and the Nasdaq Composite gained 1.0% to 17,569.
Related content
- Stocks With the Highest Dividend Yields in the S&P 500
- Analysts' Top S&P 500 Stocks to Buy Now
- Will the Fed Cut Rates in September? Here's What Experts Predict
-
Stock Market Today: The Dow Leads an Up Day for StocksBoeing, American Express and Nike were the best Dow stocks to close out the week.
-
Six Missteps to Avoid as You Transition to RetirementDon't lose sight of your finances when you finally reach retirement. These six classic missteps can chip away at the nest egg you’ve worked so hard to build.
-
Why Does One Claim Jack Up My Insurance After Years of No Claims?Even loyal customers can be hit with an insurance premium hike after a claim, despite going many years without any claims. There's a reason for that.
-
Stock Market Today: Stocks End Higher in Whipsaw SessionThe main indexes were volatile Thursday with Nvidia earnings in focus.
-
What's Next for MicroStrategy Stock as Bitcoin Nears $100,000?MicroStrategy stock is up more than fivefold in 2024 thanks to a furious rally in bitcoin. Here's what you need to know.
-
BJ's Wholesale Pops on Membership Fee Hike, Stock BuybacksBJ's stock is rallying Thursday after the warehouse club raised its membership fee for the first time in seven years and unveiled a big stock buyback program. Here's what you need to know.
-
Why Snowflake Stock Is Still a Buy After EarningsSnowflake stock is surging Thursday after cloud company beat expectations for its third quarter and raised its full-year outlook. Here's what you need to know.
-
To Future-Proof Retirement Security, We Need Better StrategiesWith retirees living longer and the inequalities that affect women and people of color, the retirement system needs some optimization. Here’s what would help.
