U.S. stocks close mixed following inflation data release

NEW YORK, Sept. 10 (Xinhua) -- U.S. stocks finished mixed on Wednesday after wholesale price data in the United States came in weaker than expected.

The Dow Jones Industrial Average fell 220.42 points, or 0.48 percent, to 45,490.92. The S&P 500 added 19.43 points, or 0.30 percent, to 6,532.04, setting a fresh record high. The Nasdaq Composite Index inched up 6.57 points, or 0.03 percent, to 21,886.06, after briefly touching an all-time intraday high earlier in the session.

Six of the eleven primary S&P 500 sectors ended lower. Consumer discretionary and consumer staples led the laggards, down 1.58 percent and 1.06 percent, respectively. Energy and technology outperformed, with both rising 1.76 percent.

The producer price index (PPI) in the United States declined 0.1 percent in August, according to the Bureau of Labor Statistics. That followed a downwardly revised 0.7 percent increase in July and fell short of expectations for a 0.3 percent gain. On a year-over-year basis, the headline PPI rose 2.6 percent.

The core PPI, which excludes food and energy, also dipped 0.1 percent, defying forecasts for a 0.3 percent increase. Stripping out food, energy, and trade services, the index advanced 0.3 percent in August and was up 2.8 percent from a year earlier.

Traders are now fully pricing in at least a quarter-point rate cut by the Federal Reserve, according to the CME FedWatch tool, and raised bets on the possibility of a deeper half-point cut following the soft inflation reading.

"With the PPI surprising to the downside, with the employment data showing much greater softness than anticipated, that basically says that there could be a reason for the Fed to cut by 50 basis points," CFRA Research's Sam Stovall said to CNBC. "What they want to do is to ensure that they are not going to be too slow, as the president describes Fed Chair Powell, and that they do at least keep up with or get ahead of the overall weakening trend."

The U.S. yield on the ten-year Treasury note eased to a five-month low of 4.04 percent just before the PPI release, hovering near its lowest level since early April as rate-cut expectations grew.

On the corporate front, Oracle shares surged more than one-third after the company lifted its outlook amid surging demand for artificial intelligence, with The Wall Street Journal reporting a 300 billion U.S. dollar cloud computing deal with OpenAI. Shares of AI chipmakers also rallied, with Broadcom climbing 9.77 percent, Nvidia rising 3.85 percent, and Advanced Micro Devices adding 2.39 percent. ■