U.S. stocks fall as PPI exceeds expectations; Apple rises 3.6%

Article by: Tide Research

On Thursday, U.S. equities closed lower for the fourth consecutive trading day: the S&P 500 fell 0.58% to 7,591.70, the Nasdaq dropped 0.65% to 26,081.72, and the Dow declined 0.60% to 52,064.10. The VIX stood at 17.28, rising approximately 5.3%. The primary pressure on the broader market came from the August PPI data, which came in higher than expected at a year-over-year increase of 5.4%, surpassing the forecast of 5.3% and rising from the prior reading of 4.7%. The 10-year U.S. Treasury yield climbed over 5 basis points to 4.849%, reaching its highest level in nearly three years, while the 2-year yield stood at 4.442%. However, the market was not uniformly lower—Apple led the Magnificent Seven with a 3.56% gain, Meta rose about 4%, and the Windi U.S. Tech Seven Index edged up 0.11%. Memory chips collectively pulled back. Brent crude surpassed $107, and gold reclaimed $4,400. The European Central Bank also announced a 25-basis-point rate hike on the same day. Tonight’s U.S. August CPI data will be the most critical variable of the week.

In the United States, the August PPI increased 5.4% year-over-year, surpassing the market expectation of 5.3% and rising from the prior reading of 4.7%; it rose 0.4% month-over-month, matching expectations and marking the largest gain since May. Core PPI increased 0.2% month-over-month, below the expected and prior value of 0.3%, but remained at 4.6% year-over-year. Following the data release, the 10-year U.S. Treasury yield rose intraday to around 4.89%.

Traders have raised the probability of a September rate hike by the Federal Reserve to over 70% and fully priced in expectations of the first hike no later than October. The 2-year U.S. Treasury yield rose more than 3 basis points to 4.442%, with the spread against the 10-year yield narrowing to approximately 40 basis points, reflecting further tightening in the pricing of the Fed’s policy path.

The U.S. Dollar Index fell for a third consecutive trading day, closing down 0.06% at 98.78. U.S. Treasury yields moved in the opposite direction of the dollar; although rising oil prices boosted inflation expectations, the dollar did not strengthen, as concerns over fiscal discipline and debt supply are eroding the dollar’s safe-haven appeal.

Beyond interest rates, geopolitical risks were another key pressure factor on Thursday.

The Middle East conflict has further escalated. The U.S. military has expanded its strike range to include Iranian oil tankers, while Houthi forces have attacked energy facilities within Saudi Arabia, prompting Iran to launch large-scale retaliatory strikes against commercial tankers and U.S. targets. The focus of the conflict has shifted from the risk of supply disruptions in the Strait of Hormuz to a naval war over control of the strait, with spillover effects extending toward Saudi Arabia and the Red Sea.

International oil prices continued their sharp upward trend. The Brent November contract closed up 6.34% at $107.63 per barrel; the WTI October contract closed up 6.69% at $102.48 per barrel. The diesel crack spread is nearing $100, and Saudi Aramco’s Jizan refinery has remained offline since being attacked in July, making diesel supply constraints more concerning than the原油 supply itself.

The energy sector was the only gainer among S&P 500 sectors, rising 1.09%. The industrial and consumer discretionary sectors declined 1.51% and 1.39%, respectively, leading the losses.

Under pressure from the broader market, technology stocks have shown clear divergence.

Internal performance among tech stocks diverged. Apple rose 3.56% to $326.57, Meta increased by approximately 4%, with continued investor support for its newly launched personal AI agent, Muse. Microsoft gained 0.16%, and Google C rose 0.61%. The Windi U.S. Tech Seven Giants Index edged up 0.11%.

The storage sector experienced a broad pullback. The Philadelphia Semiconductor Index fell 2.66%, with 25 of its 30 components declining. Intel dropped over 6%, Lam Research fell 5.65%, ARM slid more than 4%, Micron Technology declined nearly 4%, and Qualcomm, AMD, ASML, NVIDIA, and TSMC all fell more than 2%. SK Hynix closed down nearly 5% at $188.25, giving back part of its earlier gains.

The pullback in the storage sector does not negate the industry logic behind AI hardware. Over the past several trading days, individual stocks such as SK Hynix and Micron consistently reached new highs, accumulating significant short-term gains; the unexpected rise in PPI triggered a spike in interest rates, prompting profit-taking. The tension between the long-term order fundamentals of storage and optical communications and short-term valuation pressures will remain a key focus over the coming trading days.

Among Chinese stocks, the Nasdaq China Golden Dragon Index fell 2.08%. Alibaba dropped 2.8%, and iQIYI fell 5%.

In the commodities market, gold and industrial metals showed clear divergent trends.

Gold rose 1.07% to $4,402.00 per ounce, intraday reaching $4,434.10 and reclaiming the $4,400 level; silver advanced 2.32% to $67.28 per ounce. According to the World Gold Council, global gold ETFs recorded net inflows of $18 billion in August, the second-largest monthly inflow on record. Total assets under management increased to $615 billion, with holdings reaching a record-high 4,189 metric tons.

Industrial metals are under pressure. COMEX copper futures fell 5.24% to $6.5275 per pound, pressured by a sharp rise in U.S. Treasury yields and tighter dollar liquidity.

Bitcoin is trading at approximately $78,137, down 0.52% over the past 24 hours; Ethereum is trading at approximately $2,461, down over 1%.

U.S. August CPI data. This is the final inflation report of the week and a key determinant of the interest rate path for September. The PPI came in higher than expected, pushing the probability of a rate hike above 70%; the CPI reading will determine whether this probability continues to rise or retreats. Traders are extrapolating CPI figures based on PPI components, with a simple regression suggesting an August CPI monthly increase of approximately 0.4%, in line with market expectations but faster than the prior month. If core CPI exceeds 0.3% month-over-month, rate hike expectations will strengthen further; if it falls below 0.2%, the market may gain temporary relief.

Market reaction following Apple’s new product launch. Apple’s stock rose 3.56% on Thursday, leading the Magnificent Seven, but initial sales figures and supply chain feedback for the foldable iPhone Duo still require time to validate. A key area to monitor going forward is whether pricing in the consumer electronics supply chain has shifted from post-launch expectations to actual sales validation.