The stock market fell despite more economic data that showed pricing pressures eased in July, which added to investors’ hopes that inflation may have peaked—though some experts warn it could still be a long way to go before the Fed pivots away from its aggressive monetary policy tightening.
Stocks pared back some of their gains from the previous session: The Dow Jones Industrial Average rose 0.1%, less than 100 points, while the S&P 500 fell 0.1% and the tech-heavy Nasdaq Composite 0.6%.
Markets got a boost after the July producer price index (PPI), which measures wholesale inflation, decreased by 0.5% from the prior month as gasoline prices fell, compared to the 0.2% increase expected by economists.
The encouraging data comes a day after the consumer price index rose 8.5% in the 12 months ending in July—less than the 8.7% expected by economists and down from 9.1% in June.
Investors cheered the positive reports amid hopes that inflation may have finally peaked, which could allow the Federal Reserve some additional leeway to slow the pace of aggressive interest rate hikes.
Stocks also rallied on the back of more solid earnings reports, especially from the likes of Disney: Shares jumped nearly 5% after the company posted strong results and announced a price increase for its Disney+ streaming service.
Shares of theme park giant Six Flags, meanwhile, tumbled 18% after quarterly profit and revenue came in well below Wall Street expectations, with the company citing a 22% drop in attendance.