Major US equity averages fell on Thursday as investors assessed a hotter-than-expected producer price index reading for November.
At the time of writing, the Dow Jones Industrial Average was down 0.2%, and the Nasdaq Composite was also 0.2% lower. The S&P 500 also shed 0.2% on Thursday.
The producer prices index in the US, which tracks wholesale prices, rose 0.4% in November against analysts’ expectations of a 0.2% rise.
The producer prices index comes after the consumer price index on Wednesday came in line with market expectations. This had prompted investors to anticipate another interest rate cut next week by the Federal Reserve.
Clark Bellin, president and chief investment officer at Bellwether Wealth told CNBC:
While Thursday’s PPI was stronger-than-expected, we believe the Federal Reserve will still proceed with its expected 25 basis point rate cut in December, since other inflation data points in recent weeks and months have moved in the right direction.
On Wednesday, the Nasdaq Composite topped 20,000 for the first time ever. The S&P 500 index had also gained, while the Dow Jones marked its fifth consecutive session in the red.
Adobe plunges, Uber gains
Share of Adobe fell nearly 13% despite topping its fiscal fourth quarter earnings estimates, but fell behind full-year guidance forecasts.
The company issued a disappointing annual sales outlook, indicating that its recent measures to incorporate artificial intelligence into its offerings were taking longer than expected to generate returns.
Meanwhile, shares of Uber climbed more than 3%, rebounding from losses earlier this week.
The stock had dropped nearly 6% on Wednesday after General Motors halted the funding of Cruise.
The autonomous driving division had a partnership with Uber.
Producer price index comes in hot
Wholesale prices rose more than expected in November, clouding the outlook for the US monetary policy, going forward.
The index increased 0.4% on a month-on-month basis during November. Economists polled by Dow Jones had expected the figure to come in at 0.2%.
Though the market still expects the US Fed to cut interest rates by 25 basis points at next week’s policy meeting, the hotter-than-expected figure could complicate matters.
Inflation has remained sticky in the US and a resilient labour market has prompted the Fed to be cautious with its rate-cut approach.
According to the CME FedWatch tool, traders are pricing in a 99.1% probability of the Fed cutting rates by 25 bps next week.
Share of Riot Platforms jump
Shares of Riot Platforms jumped after the Wall Street Journal reported activist investor Starboard Value has taken a significant position in the bitcoin miner.
It also reported that the investors were pushing for the company to convert some of its bitcoin mining facilities into space for big-data center users.
The report did not mention the size of Starboard’s stake.
At the time of writing, the company’s shares were nearly 10% higher from the previous close.
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