US stocks choppy following hotter-than-expected PPI reading

Investing.com -- US stocks were choppy in early trading on Thursday as investors gauged hotter-than-anticipated producer price data that bolstered bets for a more measured Federal Reserve interest rate cut next week.

By 10:07 ET (14:07 GMT), the benchmark S&P 500 had dipped by 10 points or 0.2%, the tech-heavy Nasdaq Composite had edged down by 172 points or 0.4%, and the 30-stock Dow Jones Industrial Average was mostly unchanged.

On Wednesday, the main averages on Wall Street advanced, with the tech-heavy Nasdaq Composite in particular posting its largest daily increase in a month.

Producer prices rise above estimates

The producer price index for final demand in August increased by 0.2% in August, above estimates of 0.1%. The July was also revised down to show that PPI was unchanged, rather than inching up by 0.1%, according to the US Bureau of Labor Statistics.

Meanwhile, in the 12 months to August, the figure rose by 1.7% following an uptick of 2.1% in the previous month.

The numbers come after separate consumer price data earlier this week indicated that inflation rose at an equal pace month-on-month compared to July, while so-called "core" prices -- stripping out volatile items like food and fuel -- had accelerated marginally.

The Fed has been widely tipped to cut interest rates at its upcoming gathering from Sept. 17-18 in response to signs of a slowing labor market, although uncertainty surrounded whether the central bank would roll out a 25-basis point cut or a deeper 50-point drawdown. The inflation data this week has bolstered the chances that the Fed will opt for the quarter-point reduction.

Moderna dips

In corporate news, Moderna (NASDAQ:MRNA ) stock fell following its announcement of cuts to its research and development (R&D) budget.

The drugmaker revealed at its annual R&D Day that it plans to reduce its R&D expenses by approximately $1.1 billion, lowering projected costs from $4.8 billion in 2024 to between $3.6 billion and $3.8 billion by 2027. The company explained that the decision is part of its broader strategy to prioritize its existing product pipeline and focus on commercial growth.

Elsewhere, Boeing (NYSE:BA ) could be facing a strike as soon as Friday should more than 30,000 of the planemaker's workers in the US Pacific Northwest vote to begin a work stoppage and reject a tentative labor deal.

The company had previously reached a tentative agreement for a 25% pay bump, along with a commitment to building a new plane in the Pacific Northwest, better retirement benefits and an increase to the union's input into jet quality.

However, the employees, who are represented by the International Association of Machinists District 751, are likely to reject the deal on Thursday, according to media reports. Workers are reportedly asking for bigger wage increases and other improvements to the agreement.

Oil jumps amid supply disruptions

Oil prices were higher in early US trade on Thursday as expectations of supply disruptions in the wake of Hurricane Francine tempered persistent concerns over slowing global crude demand.

Hurricane Francine made landfall in Louisiana on Wednesday after passing through the Gulf of Mexico, where several oil firms limited or suspended operations in the storm’s path.

Expectations of tighter supplies helped crude rebound from near three-year lows hit earlier this week, although, with the storm due to dissipate after making landfall, traders are beginning to focus once again on demand worries.

Brent oil futures expiring in November rose 0.6% to $71.06 a barrel, while West Texas Intermediate crude futures climbed 0.8% to $67.84 per barrel by 10:00 ET.

Ambar Warrick contributed to this report.

Source: Investing.com