Dow, S&P, Nasdaq subdued as wholesale inflation slightly picks up pace

Major U.S. equity averages searched for direction Thursday, as investors weighed a second straight report of firm monthly inflation, albeit within market expectations.

The S&P 500 (SP500) -0.1%, the Nasdaq Composite (COMP:IND) was -0.1%, and the Dow (DJI) hovered around the flat line. Disney (DIS), however, climbed +7.3% after beating Q4 expectations. A loss Thursday would be the second in a row for the benchmark (SP500) and the Nasdaq (COMP:IND), as Wednesday’s session snapped their win streaks launched the day after last week’s U.S. elections.

Thursday’s session brought in the October Producer Price Index report, and both headline and core readings met expectations in rising from September. Headline PPI increased 0.2% M/M from September’s upwardly revised +0.1% print. Most of the PPI increase stemmed from a rise in final-demand services. The Consumer Price Index released Wednesday showed headline and core prices staying firm last month, meeting expectations.

“After the fresh US CPI reading, traders know that the Fed’s battle with inflation is still not a walk in the park,” Naeem Aslam, chief investment officer at Zaye Capital Markets, said in a note. “[Any] optimism about inflation being tamed needs to be considered with a pinch of salt.”

In the fixed-income market, the 10-year Treasury yield (US10Y) was lower by 1 basis point at 4.41%. The 2-year yield (US2Y) was down by 2 basis points at 4.26%.

The October CPI report strengthened the odds of the Federal Reserve cutting interest rates again next month. Investors on Thursday will watch for what Fed Chair Jerome Powell might say about monetary policy when he participates in a conversation before an event hosted in part by the Federal Reserve Bank of Dallas.

Also on Thursday, weekly initial jobless claims surprised to the downside.