Stocks Bounce Back With Tech, Gold Gaining After Modest Producer Inflation Data: What's Driving Markets Thursday?

Investors can breathe a sigh of relief on Thursday as last month’s Producer Price Index (PPI) inflation turned out slightly lower than expected, albeit with some caveats across different measures within the basket.

Stocks rebounded by noon trading in New York, yet the surge fell short of recovering Wednesday’s losses, indicating lingering nervousness regarding the rate-path outlook.

Traders have significantly adjusted their expectations for the Fed’s future actions in the past 24 hours, pushing the potential first-rate cut from June to September, with less than two cuts priced in by year-end.

The tech-heavy Nasdaq 100 outperformed the broader market, up 1.2%, driven by a rally in the semiconductor industry, with Nvidia Corp. NVDA surging 3.1% following a 2% increase the previous day.

Treasury yields stayed flat in the short-end, while inching higher in the long-end of the curve, triggering further declines in long-dated Treasury bonds. The iShares 20+ Year Treasury Bond ETF TLT was down 0.2%, on track to the lowest close in nearly six months.

The U.S. dollar index (DXY) held broadly steady. In Europe, the European Central Bank (ECB) hinted at a potential interest-rate cut in June, pushing back fears of delay linked to U.S. inflation and the Fed’s actions.

Gold, as tracked by the SPDR Gold Trust GLD, continued to show strong resilience, rising nearly 1% on track to a new record-high close. Bitcoin BTC/USD softened 0.5% to $70,200.

Wednesday's Performance In US Major Indices, ETFs

The SPDR S&P 500 ETF Trust SPY rose 0.7% to $517.50, the SPDR Dow Jones Industrial Average DIA flat at $384.83 and the tech-heavy Invesco QQQ Trust QQQ rose 1.2% to $443.69, according to Benzinga Pro data. 

Sector-wise, the Technology Select Sector SPDR Fund XLK outperformed, up 1.4%, while the Energy Select Sector SPDR Fund XLRE fell the most, down by 0.4%.

Thursday’s Stock Movers

• Nike Inc. NKE rose 3.8% after Bank of America upgraded the retail giant from Neutral to Buy and raised the price target from $110 to $113.
• Paramount Global PARA rallied 6.5%, marking the strongest daily performance within the S&P 500, after rumors of the company mulling the sale of VidCon.
• Globe Life Inc. GL plummeted by over 35% following allegations of insurance fraud and pyramid scheme behaviors made by short-seller Fuzzy Panda.
• CarMax Inc. KMX tumbled 11% after missing earning estimates last quarter.
• Nikola Corp. NKLA fell nearly 20% after the company’s proposal for a reverse stock split.
• Alpine Immune Sciences Inc. ALPN skyrocketed 37% after Vertex Pharmaceuticals VRTX announced a $4.9 billion deal to buy Alpine Immune Sciences for $65 per share, implying a 38% premium from Wednesday’s close.

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Image generated using artificial intelligence via Midjourney.