Dow Stumbles as PPI Inflation Burns Hotter Than Forecast—Traders Sweat

Wall Street's fear gauge flickers back to life as producer prices deliver another gut punch.

PPI surprise throws cold water on Fed pivot hopes

The Dow's slide signals traders aren't buying the 'transitory' narrative anymore—not with supply chains still snarled and energy prices playing whack-a-mole. Another day, another reminder that central bankers are just glorified weather forecasters with fancier suits.

Risk assets wobble as reality bites

Traditional markets flinch while crypto traders shrug—because when has inflation ever hurt an asset class designed to bypass broken monetary systems? Still, even Bitcoin maximalists might want to check those CPI hedges twice.

Stocks fall on hot PPI

Wall Street’s reaction followed July’s producer price index data, which showed PPI PPI ROSE 0.9% month-over-month, far above the consensus estimate of 0.2%. The inflation report also showed producer prices climbed 3.3% annually in July, the highest since February 2025. Meanwhile, “core” PPI, which excludes food and energy costs, rose at levels last seen in June 2022.

PPI 0.9% MoM, Exp. 0.2%
PPI 3.3% YoY, Exp. 2.5%

PPI Core 0.9% MoM, Exp. 0.2%
PPI Core 3.7% YoY, Exp. 3.0%

The S&P 500 and Nasdaq remain NEAR record highs, reached as Wall Street celebrated corporate earnings and cooler-than-expected CPI. However, the latest inflation report on wholesale costs injected jitters into the market, with investors concerned the PPI reading could lead the Federal Reserve to delay a rate cut in September.

Despite the hotter data, fed funds futures still signaled a bullish outlook, with investors pricing the odds of a Fed rate cut in September at 93%, down only slightly from 94% on Wednesday. Traders monitoring other market factors helped the Dow recover part of its losses, though it was still down 98 points at the time of writing.