Daily Summary: Wall Street Gains, Dow Jones Near All-Time Highs After Softer PPI Data

U.S. equities are enjoying another solid session today, although the Nasdaq 100 is down less than 0.2% despite an initially sharp selloff in AI-related stocks. Those losses have been largely offset by a rebound in Big Tech shares. The S&P 500 is gaining 0.3% and moving closer to the 7,600-point mark, while the Dow Jones remains near record highs. June producer price inflation came in below expectations, and together with strong corporate earnings and a rally in ASML shares, helped support risk assets.

• June PPI (MoM): -0.3% (Expected: 0.0%; Previous: 0.6%)
• June PPI (YoY): 5.5% (Expected: 6.2%; Previous: 6.0%)
• Core PPI (MoM): 0.2% (Expected: 0.3%; Previous: 0.4%)
• Core PPI (YoY): 4.7% (Expected: 5.2%; Previous: 4.9%)

Another U.S. inflation report surprised to the downside. Producer prices fell by 0.3% month over month, while both headline and core annual inflation measures slowed more than expected, reinforcing yesterday's softer-than-expected CPI report.

Today's gains on Wall Street are being led by Meta Platforms, Alphabet, Microsoft, Apple, Amazon, and Oracle, potentially signaling a gradual shift in investor sentiment and a rotation of capital away from AI infrastructure suppliers toward the Magnificent Seven. Bank stocks are also performing strongly, supported by another round of record earnings, with the broader financial sector led by BlackRock. Shares of the asset management giant are up more than 6% after the company beat expectations on revenue, earnings, and assets under management (AUM), which reached a record $15.3 trillion.

The U.S. Dollar Index is trading lower today, approaching the 100 level, while EUR/USD is up 0.5% to 1.147. Bitcoin has climbed back above $65,000, extending its rebound and gaining roughly 10% from its recent lows.

The Bank of Canada (BoC) left its benchmark interest rate unchanged at 2.25%, in line with market expectations. Policymakers said the current level of interest rates remains appropriate to support the economic recovery. The central bank lowered its 2026 GDP growth forecast to 0.7% from 1.2%, while raising its 2027 growth projection to 1.8% from 1.6%. It also increased its estimate for second-quarter annualized GDP growth to 2.5%, following a 0.1% contraction in the first quarter.

The BoC expects economic growth to gradually accelerate through 2027 and 2028. It forecasts inflation to slow to around 2.5% in the second half of 2026 before returning to its 2% target in early 2027. The central bank also noted that long-term business inflation expectations remain well anchored, while Canada's labor market continues to be weak but broadly stable.

The latest EIA report delivered mixed signals for the energy market. U.S. crude oil inventories fell by 1.69 million barrels, slightly more than expected, while gasoline inventories also declined by 1.53 million barrels. However, distillate inventories unexpectedly increased by 4.56 million barrels, despite forecasts calling for a decline. Oil and natural gas prices are trading broadly flat today, although crude oil remains up more than 7% over the past week.

The Federal Reserve's Beige Book indicated that U.S. economic activity continued to expand between mid-May and early July, although growth was generally modest to moderate, with several districts reporting little or no growth. Consumer spending remained under pressure from higher prices, particularly for fuel, while demand for services continued to increase.

The labor market remained stable, with employment rising modestly across most Federal Reserve districts. However, businesses continued to report difficulties finding skilled workers, particularly in construction, manufacturing, and retail. Wage pressures remained moderate, although wage growth eased in several regions.

Some companies also reported increasing use of artificial intelligence in hiring processes and to improve employee productivity. Most districts continued to report rising costs and prices, particularly in services, construction, and manufacturing, with some businesses passing higher costs on to customers. Labor market contacts cited by the Fed remained cautiously optimistic about further economic growth but highlighted persistent cost-related uncertainty and expect inflation to ease only gradually.

DJIA futures chart (US30, D1 interval)

The Dow Jones Industrial Average, which has greater exposure to traditional "old economy" companies, continues to outperform. DJIA futures are posting gains today, remaining largely unfazed by the weakness seen in the AI infrastructure sector.

Source: xStation5

Source: xStation5