S&P 500 Hits Record Intraday High as Softer PPI and Falling Oil Lift Stocks

The S&P 500 climbed to a record intraday high Thursday morning, moving above 7,800 as a cooler-than-expected producer inflation report and a sharp retreat in oil prices eased some of the pressures that had revived interest-rate concerns. Technology shares added to the advance, putting the benchmark back above the record territory it reached last week.

At 10:48 a.m. Eastern time, the S&P 500 was at 7,804.23, up 0.72%, after reaching a session and all-time high of 7,816.70. At the same point, the Nasdaq Composite was up 0.89% and the Dow Jones Industrial Average was ahead 0.21%. The figures are intraday and can change materially before the closing bell.

S&P 500 moves above 7,800 as technology shares gain

The move extended a rebound that has returned the large-cap benchmark to record levels after a volatile start to the second half of the year. The S&P 500 had closed at a record 7,757.64 on August 7, then slipped in the following sessions before turning higher again on Wednesday. Thursday’s rise carried it decisively above the 7,800 level in early trading.

Technology was one of the main sources of strength. In morning trading reported by Reuters, the S&P 500 information-technology sector was up about 1%, with Microsoft higher by roughly 1.4%, Nvidia up 0.6% and Apple ahead 0.5%. The gains helped the Nasdaq outperform the Dow and reinforced the role of large technology companies in the latest leg of the market’s advance.

The rally was not limited to a few megacap names. Advancing stocks outnumbered decliners by more than two to one on both the New York Stock Exchange and Nasdaq in Reuters’ morning snapshot, and the S&P 500 had posted 28 new 52-week highs with no new lows at that point. That breadth matters because it indicates that the move was being supported by a wider group of stocks rather than only by the largest index weights.

There were still sharp company-specific declines. Cisco Systems dropped after its quarterly report as investors focused on margin concerns despite a stronger revenue outlook, and Tapestry fell heavily following its earnings release and guidance. Those losses did not prevent the broader market from advancing, while PC makers Dell and HP gained after strong results from Lenovo added to optimism around technology demand.

Softer PPI reduces immediate pressure on the Fed

The key macroeconomic catalyst came before the opening bell. The U.S. Bureau of Labor Statistics reported that the Producer Price Index for final demand was unchanged in July on a seasonally adjusted basis, following a 0.1% decline in June. Economists surveyed by Reuters had expected a firmer reading. On a 12-month basis, final-demand prices rose 4.7%, down from 5.5% in June and below the 4.9% increase economists had expected.

The headline number was softer, but the details were mixed rather than uniformly benign. Final-demand goods prices fell 0.7% in July, with energy prices down 3.1% and food prices down 0.9%. Gasoline prices fell 5.7%. Services prices, by contrast, rose 0.2%, while construction prices increased 2.2%. The index excluding food, energy and trade services rose 0.4% for the month and was also up 4.7% from a year earlier.

That distinction is important for the interest-rate outlook. The PPI report eased concern that the recent energy shock was immediately feeding through to a broader acceleration in producer prices, but it did not show that underlying inflation pressure had disappeared. The Federal Reserve’s preferred inflation gauge is the personal consumption expenditures price index, and some PPI categories feed into that measure. Investors therefore treated Thursday’s report as evidence favoring patience rather than as a definitive signal that inflation has been defeated.

Interest-rate futures shifted further toward a pause after the release. Reuters reported that traders were pricing about a 65% chance that the Fed would leave rates unchanged at its September meeting, up from about 60% before the PPI data. The next scheduled Federal Open Market Committee meeting is September 15-16.

Bond-market moves pointed in the same direction. The 10-year Treasury yield fell in morning trading, reducing one source of valuation pressure on equities. Lower long-term yields can make future corporate earnings more valuable in present-value terms and can also improve financing conditions for interest-sensitive industries, although the relationship is not mechanical from one session to the next.

Oil’s retreat eases another source of inflation pressure

Falling crude prices gave stocks a second macro tailwind. Brent crude was down more than 2% in morning trading after six consecutive sessions of gains, with the Associated Press later putting the decline at 3.3% to $86.02 a barrel. The pullback followed a volatile stretch in which Middle East tensions and uncertainty around the Strait of Hormuz had kept energy markets unusually sensitive to geopolitical headlines.

Oil also faced pressure from supply and demand signals. The U.S. Energy Information Administration’s latest weekly report, released Wednesday, showed commercial crude inventories increased by 2.0 million barrels in the week ended August 7. Reuters also cited expectations for weaker global demand as a factor behind Thursday’s retreat.

For equity investors, cheaper oil matters through several channels. It can reduce expected fuel and transportation costs, lessen the risk that energy prices feed into broader inflation, and ease some pressure on household spending. In Thursday morning trading, airlines, cruise operators and real-estate shares were among the groups benefiting as oil and Treasury yields moved lower.

The combination of softer producer inflation, lower crude prices and firmer technology shares gave the market a cleaner setup than it had earlier in the week, but the session remained an intraday story rather than a closing record. The S&P 500’s final level will determine whether the benchmark converts Thursday’s record high into a new record close. Beyond the session, the next major policy checkpoint is the Fed’s September 15-16 meeting, when officials will weigh another month of inflation and labor-market data before deciding whether to keep rates steady or tighten again.