Market Moves: Inflation Data Shakes Wall Street, Global Trends Emerge

Global stocks dipped slightly while U.S. Treasury yields rose due to strong inflation data impacting Federal Reserve interest rate cut expectations. The S&P 500 achieved a new closing high for the third consecutive session. Despite a rise in U.S. producer prices, markets expect future Fed rate reductions.

Global stock markets experienced a slight downturn on Thursday, with Wall Street equities ending broadly unchanged. U.S. Treasury yields climbed following unexpected strength in inflation data, which cast doubt on anticipated Federal Reserve interest rate cuts. The S&P 500 managed a modest rise, marking its third consecutive record close.

Market participants were taken aback by U.S. producer prices' 0.9% increase in July, sharply exceeding forecasts. This inflation data forced investors to reassess Federal Reserve rate cut expectations. Despite market concerns, European stocks retained earlier gains, and global indices took a breather.

In the bond market, yields surged as the likelihood of aggressive Fed rate cuts diminished. Traders continue to widely expect a 25-basis-point reduction next month, albeit with slightly less certainty than before. The dollar appreciated against key currencies, and oil prices rebounded, contributing to an eventful market day.

(With inputs from agencies.)