U.S. equities climbed on Thursday, with the S&P 500 up 0.65% and the Nasdaq 100 rising 1.15%, as a favorable Producer Price Index report eased pressure on bond yields and reduced the market’s odds of an additional Federal Reserve rate hike in September. Investors also found support from a more than 2% drop in crude oil prices and renewed focus on upcoming earnings, particularly in artificial-intelligence-related sectors.
Rates and energy moved alongside equities: the benchmark 10-year Treasury yield fell about 4.4 basis points to 4.639% after the PPI print, while West Texas Intermediate futures moved lower amid a lull in new military developments in the Persian Gulf.
Key takeaways
- Price move: The S&P 500 rose 0.65%, the Dow gained 0.13%, and the Nasdaq 100 climbed 1.15%.
- Catalyst: A July PPI report came in weaker than expected, supporting a drop in the 10-year Treasury yield and dialing back September Fed hike expectations.
- Energy support: Crude oil fell more than 2% on the absence of new strikes and reports of a shift toward economic pressure on Iran.
- Earnings focus: Markets are looking for strong Q2 results, with AI spending expected to play a central role.
- Investor implication: With rates sensitive to inflation data, the market’s reaction suggests traders are increasingly positioning for a less restrictive path—though supply dynamics still weigh on Treasuries.
What drove the move
Thursday’s rally followed a PPI release that traders viewed as another step toward moderating inflation. According to the report, July final-demand PPI was unchanged month over month and rose 4.7% year over year—softer than market expectations. Core PPI rose 0.2% month over month, also below consensus, though the year-over-year reading remained elevated.
The market reaction was immediate in rates. According to the article’s data, the 10-year Treasury yield fell roughly 4.4 basis points after the PPI report. At the same time, investors lowered the probability they assign to a September Fed rate hike. According to the market-implied figures cited, the chance of a 25-basis-point hike was 35%, down from 40% on Wednesday.
Energy provided an additional tailwind. WTI futures declined more than 2% amid reports of a U.S. approach emphasizing a naval blockade rather than additional strikes, alongside no indication of new military attacks in the region. The piece also noted ongoing uncertainty around efforts to reopen the Strait of Hormuz, with competing statements from U.S. and Iranian officials.
Market reaction and what investors priced
In equities, the gains were broad enough to lift major indexes, but sector-level performance remained mixed. Tech stocks benefited from carry-over strength from overseas, where South Korea’s Kospi rose sharply overnight. U.S. chip equities also held up, with the iShares Semiconductor ETF up about 0.8% as investors favored the AI complex.
Within the technology trade, however, losses at specific names highlighted the market’s continued sensitivity to guidance. Cisco fell more than 8% after disappointing expectations tied to AI-related networking gear demand. Cerebras Systems dropped more than 12% following guidance that the article described as weaker than expected for its hardware business.
Rates also reflected an ongoing tug-of-war between improving inflation prints and government financing pressures. According to the article, the Treasury sold $35 billion of 30-year bonds at an auction yield of 5.216%, the highest since 2001. That supply backdrop, the piece said, contributed to higher required yields as investors weigh the deficit, inflation risk, and uncertainty around the Fed’s direction.
Earnings, megacaps, and individual stock moves
Investors leaned into the outlook for corporate earnings. According to Bloomberg Intelligence figures cited in the article, the S&P 500 was tracking for nearly 32% earnings growth in the second quarter, above a broader consensus range. The report attributed much of the expected expansion to AI spending, with AI infrastructure projected to account for a significant share of the index’s earnings-per-share growth.
Market participants also treated recent earnings results as confirmation. The article cited Bloomberg data indicating that 85% of the 446 S&P 500 companies that had reported second-quarter results beat estimates, supporting the idea that guidance risk may be less severe than feared.
Among large technology and AI-linked names, the article reported that the “Magnificent Seven” closed higher except for Amazon, which fell about 0.8%. Tesla rose more than 3%, and Meta gained more than 2%.
Other notable movers included:
- Semiconductors: Micron rose more than 4%, while Intel and Lam Research each gained more than 3%.
- Enterprise software: Salesforce jumped more than 4% after JPMorgan rated the stock overweight and argued AI-related SaaS implications were being exaggerated.
- Cloud and retail: JD.com’s U.S.-listed ADR fell more than 7% after quarterly revenue declined for the first time since its 2014 IPO. StubHub dropped more than 10% after a disappointing earnings report.
- Energy-linked uncertainty: Broader market strength came as oil eased, although geopolitical risk around the Strait of Hormuz remained in focus.
Bigger picture: what to watch next
With the market actively repricing rate expectations after inflation data, investors will likely watch for additional price signals from upcoming releases and the next Federal Reserve meeting. According to the article, traders were also focused on central-bank decisions globally, including the European Central Bank’s upcoming meeting.
Earnings momentum may remain a near-term driver. The article pointed to the broader expectation for strong Q2 results, and investors will be watching for guidance and results from companies scheduled to report next—among them Liberty Live Holdings on August 14, 2026.
