(Updates with index/price moves, macroeconomic/CME data, and company news from the first paragraph.)
US equity indexes rose as technology pared back losses and investors lowered expectations of a back-to-back monetary policy tightening in October amid the fastest growth in producer prices in more than four years.
The Dow Jones Industrial Average jumped 1.1% to 52,177.69, the S&P 500 climbed 0.3% to 7,744.06, and the Nasdaq Composite edged up less than 0.1% to 26,713.03 on Thursday. All sectors except energy, technology, and utilities rose. Healthcare, materials, financials, and consumer discretionary topped the gainers.
The producer price index rose 1.3% last month from 0.5% in August, the Bureau of Labor Statistics said. The print marked the strongest pace of advance since March 2022, and is more than double the 0.6% climb projected in a Bloomberg-compiled survey. Annually, the PPI climbed 6.3%, the biggest jump since December 2022 and exceeding the 5.4% estimate. August was revised to a 5.6% gain from 5.4%.
US retail sales rose 0.8% in September, above the 0.3% gain expected in a Bloomberg-compiled survey and August's revised 1.3% gain, according to the US Commerce Department.
A 6.4% jump in nominal gasoline spending drove most of the retail sales growth, Jefferies said in a note. Control group sales rose 0.1% after a 1.2% increase in August, the note said. "This was the result of modest increases and declines across the various sub-categories."
Like on Wednesday, when the 10-year government bond yield sank following a hotter-than-expected core consumer price inflation report, the reaction to September's hot producer prices was the same on Thursday. Most US Treasury yields slumped, with the two-year declining 4.7 basis points to 4.76%, the 10-year down 10.1 basis points to 5.09%, and the 30-year diving 9.4 basis points to 5.43%.
Following Thursday's inflation data, the CME FedWatch tool showed that the probability of the Federal Reserve leaving its target rate unchanged this month jumped to 73%, up from 67% on Wednesday. The increase came entirely at the expense of raising the target rate by 25 basis points this month.
Gold futures jumped 1.5% to $4,167.6, and silver futures advanced 2.2% to $57.11.
The cost of protecting CoreWeave's (CRWV) debt against default for five years rose Thursday by as much as 74.5 basis points to 1194.5 basis points, an intraday record, with swaps pricing in a chance of default at over 60% within the next five years, Bloomberg reported Thursday, citing data from ICE Data Services.
The PHLX Semiconductor slumped 0.9%, its seventh consecutive day of losses but off session lows.
Ukraine will resume strikes on Russia's oil refineries after halting attacks for three days following a surprise "energy ceasefire," CNN reported, citing President Volodymyr Zelensky.
Meanwhile, two cargo ships sank near the Strait of Hormuz in the past 24 hours after being struck by unknown projectiles in separate incidents, CNN reported, citing the Maritime and Port Authority of Singapore and the International Maritime Organization.
The International Energy Agency agreed to complete the remaining releases of about 100 million barrels of oil, consistent with the March collective action in response to the Hormuz crisis. The IEA said it will accelerate the remaining releases, including more than 20 million barrels of diesel, as soon as possible.
The front-month US West Texas Intermediate crude oil contract jumped 2.7% to $97.65 per barrel, while global benchmark Brent slipped 0.2% to $105.85 per barrel.
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