US equity markets fell on Thursday after unexpectedly high producer-price data stoked concerns about persistent inflation, while rising oil prices added to the pressure. The Dow Jones Industrial Average dropped 0.3% to 52,216, the S&P 500 lost 0.5% to 7,595 and the Nasdaq Composite fell 0.7% to 26,060.
US producer prices rose 5.4% year-on-year in August, beating the 5.3% forecast, according to data released by the Commerce Department. The hotter-than-expected figure boosted market pricing in a rate increase: traders now see a 70% probability the Federal Reserve raises rates by at least 25 basis points next week, up from 65% before the data. The Fed's preferred gauge — consumer prices — will be released on Friday and is expected to carry significant weight in the central bank's upcoming decision.
Rising oil prices compounded inflation fears. US light sweet crude (WTI) climbed above $100 a barrel for the first time since May. Brent crude, which had already breached the mark on Wednesday, traded at $105.30 a barrel. Both contracts were roughly 4% higher on the session. The Iranian-backed Houthi militia seized the Yemeni port city of Mokha near the Bab al-Mandab strait, further disrupting shipping on key routes through the Strait of Hormuz and the Red Sea in the six-month-old Middle East conflict.
Among individual names, Navan shares plunged 22% after the business-travel and expense-management company reported a doubling of its operating loss in the latest quarter due to high costs. Macy's fell about 5%; the department-store operator raised its full-year outlook on strong performance at Bloomingdale's and Bluemercury but warned that elevated store-renovation costs would weigh on the current quarter. American Eagle shed roughly 15% after worse-than-expected sales figures. AeroVironment rose 5.2% after a drone-maker report that beat revenue estimates.
In Switzerland, the SMI slipped 0.36% to 13,754 points, erasing gains posted earlier in the session. The index has lost more than 600 points this week and now trades near mid-June levels, wiping out gains from the past three months. Kühne+Nagel led gainers at +2.2%, while Alcon and Amrize each fell 2.5%. UBS, Roche, Givaudan and Richemont declined between 1.2% and 1.5%, with Richemont still recovering from an HSBC industry-study hit the prior session. Novartis was the sole bright spot, rising 1.4% to lead the SMI. Trading volume for Alcon was weighed by rival Cooper Companies' weaker-than-expected interim results and lowered guidance, though some analysts are unsure whether the weakness reflects a company-specific issue or a broader demand slowdown that could also affect Alcon.
European equities broadly softened following the European Central Bank's anticipated 25-basis-point rate hike to 2.5%, with little market reaction to the decision. Copper retreated 2.2% to $14,440 a tonne after hitting a third consecutive record high of $14,875, as profit-taking followed speculation that import tariffs are redirecting supply into the US and tightening availability elsewhere.
Pre-market futures pointed to further Wall Street weakness: the Dow Jones industrial average futures were 0.2% lower at 52,273, while Nasdaq 100 futures lagged 1.1% at 29,106.
