Fed Rate Cut Weighed Amid Producer Price Data & Moderna Stock Slump
Wall Street remained steadied on Thursday as new producer price data indicated a minimal interest rate cut by the Federal Reserve. Moderna shares nosedived due to a bleak revenue forecast. The Dow, S&P 500, and Nasdaq showed mixed results, while economic sensitivities stirred interest rate expectations.
Wall Street showed little movement on Thursday, prompted by higher-than-expected producer price data, which supported a modest 25-basis-point interest rate cut by the Federal Reserve. At the same time, shares of vaccine manufacturer Moderna plummeted following a disappointing revenue forecast.
The producer price index (PPI) for final demand increased by 0.2% in August, surpassing estimates of 0.1% growth. Core PPI, excluding volatile food and energy prices, rose by 0.3%, above the forecasted 0.2%. Peter Cardillo, chief market economist at Spartan Capital Securities, noted, "Today's PPI numbers confirm that the Fed will not be as aggressive in cutting rates as the market anticipated."
In separate economic data, initial state unemployment claims stood at 230,000 for the week ending September 7, consistent with expectations. Meanwhile, Moderna's stock plummeted 17.8%, reaching its lowest level since November, due to a revenue forecast below analysts' estimates. Interest rate cut expectations subsided after recent data, with traders now foreseeing an 85% chance for a 25 bps cut in the upcoming Fed meeting.
(With inputs from agencies.)
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