Wall Street Awaits Fed Decision Amid Mixed Economic Signals

Wall Street prepares for a muted opening as a hot producer prices reading keeps a smaller Federal Reserve rate cut likely. Jobless claims align with estimates, while Moderna slumps due to a disappointing revenue forecast. Investor sentiment is mixed, with tech sector gains and inflation data creating volatility.

Wall Street was poised for a subdued opening on Thursday following a hotter-than-expected producer prices reading, which suggests a smaller than anticipated Federal Reserve rate cut. The producer price index (PPI) for final demand grew by 0.2% last month, surpassing the 0.1% forecast. Excluding volatile food and energy prices, the core number rose 0.3%, higher than expected 0.2%.

Peter Cardillo, chief market economist at Spartan Capital Securities, commented, 'Headline PPI inflation came in as expected, but the core rate followed the consumer's core rate almost exactly, a bit more than expected. Today's PPI numbers confirm that the Fed is unlikely to be as aggressive in cutting rates as the market anticipated.'

In other developments, initial unemployment claims registered at 230,000 for the week ending September 7, aligning with estimates, while Moderna saw a 13.1% drop in premarket trading after a downbeat revenue forecast. Despite a series of weakening economic indicators, expectations for a large Federal Reserve rate cut have diminished, with traders now predicting an 85% likelihood of a 25 bps cut at the upcoming September meeting.

(With inputs from agencies.)