US Stocks Stall Despite Benign PCE Inflation, Down Month Looms: What's Driving Markets Thursday?

Wall Street was broadly flat in Thursday midday trading in New York, with the S&P 500 Index attempting to mark its fifth consecutive day of gains as an inline PCE inflation report dispelled expectations of an impending Fed rate hike.

The core PCE price index, the Fed’s preferred inflation gauge, came in at 4.2% year on year in July, slightly higher than June’s 4.1% but in line with expectations. The headline PCE price index increased from 3% to 3.3% year on year, matching estimates.

Investors now await the crucial August jobs report, which will be released at 8:30 a.m. ET Friday.

Overall, August is poised to be a negative month for the U.S. stock market, as the four major averages are headed toward a negative monthly close. August will also likely break a consecutive streak of five months of gains for both the SPDR S&P 500 ETF Trust SPY and the Invesco QQQ Trust QQQ.

Cues From Thursday's Trading:

The S&P 500 Index edged 0.04% higher, while blue-chip stocks in the Dow Jones Industrial Average fell 0.1%.

Tech managed to outperform, with the Nasdaq 100 Index up 0.3%. Small caps in the Russell 2000 inched 0.1% higher.

US Index Performance On Thursday

Thursday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust was flat at $451.30.
• The SPDR Dow Jones Industrial Average ETF DIA eased 0.1% to $349.11.
• The Invesco QQQ Trust rose 0.3% to $377.91, according to Benzinga Pro data.

Looking at S&P 500’s sector ETFs:

• The Technology Select Sector SPDR Fund XLK, the Consumer Discretionary Select Sector SPDR Fund XLY and the Communication Services Select Sector SPDR Fund XLC were the only sectors in the green, with all showing a 0.3% gain.
• The Real Estate Select Sector SPDR Fund XLRE was the underperformer, falling 0.4%.

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Stocks In Focus:

• Salesforce, Inc. CRM rose 3% following the release of its quarterly results.
• Other stocks reacting to earnings include Okta, Inc. OKTA (up over 12%), Chewy, Inc. CHWY (down about 11%) and Victoria’s Secret & Co. VSCO (up over 6%), Five Below, Inc. FIVE (down about 4%), Ciena Corp. CIEN (up nearly 16%), CrowdStrike Holdings, Inc. CRWD (up nearly 10%) and Dollar General Corp. DG (down about 13%).
• Palantir Technologies, Inc. PLTR fell over 9% following a bearish recommendation from Morgan Stanley.
Companies reporting after the close are Broadcom, Inc. AVGO, Dell Technologies, Inc. DELL, Nutanix, Inc. NTNX, Lululemon Athletica, Inc. LULU, MongoDB, Inc. MDB, VMware, Inc. VMW, Oxford Industries, Inc. OXM, PagerDuty, Inc. PD and SentinelOne, Inc. S.

Commodities, Bonds, Other Global Equity Markets:

Crude oil rose 0.6%, with a barrel of WTI-grade crude trading at $82. The United States Oil Fund ETF USO was 0.6% higher to $74.  

Treasury yields were slightly lower, with the 10-year yield down by 4 basis points to 4.08% and the two-year yield down by 2 basis points to 4.87%. The iShares 20+ Year Treasury Bond ETF TLT was 0.8% higher for the day. 

The dollar rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, up 0.5%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.8% lower to 1.0836.

European equity indices had a negative session. The SPDR DJ Euro STOXX 50 Etf  FEZ fell 1.5%. 

Gold held steady at $1,941/oz, while silver fell 0.6% to $24.44. Bitcoin BTC/USD was 3.2% lower to $26,424.

Staff writer Piero Cingari updated this report midday Thursday. 

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