Wall Street rises as soft PPI eases Fed rate fears
US equities rose after cooler-than-expected producer prices reinforced hopes that the Federal Reserve will keep rates steady, while PayPal surged on a reported $53 billion buyout offer.
US equities pushed higher at the open on Wednesday as a drop in producer inflation reinforced expectations that the Federal Reserve will hold interest rates steady. At the opening bell, the Dow Jones Industrial Average added 95.9 points to 52,604.2. The S&P 500 gained 28.1 points to 7,571.72, and the Nasdaq Composite advanced 154.2 points to 26,261.18. By 10 a.m. Eastern Time, all three indices held gains of roughly 0.4% to 0.6%.
The catalyst was a 0.3% month-on-month decline in the Producer Price Index for June, the first monthly drop since August 2025. Driven primarily by lower energy costs, the figures followed a softer-than-anticipated Consumer Price Index report on Tuesday.
Together, the data points significantly reduced market fears that policymakers might need to resume rate hikes to combat sticky prices. The yield on the 10-year Treasury dipped to 4.56% from 4.58%.
Individual stock moves were largely driven by corporate developments. PayPal Holdings surged 13.58% after reports emerged of a $53 billion takeover proposal. In the financial sector, BlackRock soared 7.6% after posting quarterly profit and revenue that exceeded expectations. Bank of New York Mellon climbed 2.5% and Morgan Stanley gained 1% on similarly strong earnings.
However, the domestic inflation data contrasted with rising geopolitical premiums in commodity markets. Crude oil pushed higher after the US reimposed a naval blockade on Iran and intensified an airstrike campaign in retaliation for Iranian attacks on ships in the Strait of Hormuz.
Iranian officials stated the American strikes hit an army barracks, killing at least seven troops and wounding more than 260 people. Brent futures rose 0.2% to $84.91 a barrel, while West Texas Intermediate gained 0.3% to $79.60.
Spot gold edged up 0.3% to $4,067.60 an ounce, and US gold futures added 0.2% to $4,075.80. Elsewhere in metals, silver dipped 0.1% to $58.58, platinum rose 0.4% to $1,638.24, and palladium fell 0.1% to $1,303.50. Elevance Health slumped 11.1% despite beating profit and revenue estimates, weighed down by a disappointing outlook.
