The S&P 500 Index ($SPX) (SPY) is up +0.57%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.04%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +1.22%. September E-mini S&P futures (ESU26) are up +0.58%, and September E-mini Nasdaq futures (NQU26) are up +1.22%.
Stocks are seeing support as today’s favorable PPI report caused a -7 bp decline in the 10-year T-note yield and a drop in expectations for a Fed rate hike to 35% from 40% on Wednesday. Stocks are also seeing support from today’s drop of more than -1% in crude oil prices, amid a lack of reports of fresh US or Iranian attacks in the Persian Gulf.
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US tech stocks were undercut today by a -8% drop in Cisco Systems after disappointing guidance, and a drop of more than -13% in Cerebras Systems (CBRS) due to a decline in sales at its hardware business. US tech stocks have some carry-over support from an overnight +3.6% rally in the South Korean Kospi index, driven in part by a more than +5% rally in Samsung Electronics and chip-maker SK Hynix.
Today’s US PPI report was favorable. The July US final-demand PPI report of unchanged m/m and +4.7% y/y was weaker than market expectations of +0.2% m/m and +4.9% y/y. The July core PPI report of +0.2% m/m was weaker than market expectations of +0.3%, although the year-on-year figure of +4.2% y/y was slightly stronger than market expectations of +4.1% y/y. The July PPI of +4.7% y/y was down from May’s 3.5-year peak of +5.9% y/y but was still far above the Fed’s inflation target of +2%.
Today’s PPI report followed yesterday’s favorable July US CPI report, when the July core CPI fell to match the 5.5-year low of +2.5% y/y originally posted earlier this year. Meanwhile, the nominal CPI fell to +3.4% from June’s +3.5% but remained well above the 5.5-year low of +2.3% posted last year.
Sep WTI crude oil prices (CLU26) are down more than -1% on the lack of any new military strikes in the Persian Gulf region and on reports that the Trump administration is pivoting to using the naval blockade to apply economic pressure on Iran rather than new military attacks. There are no reports of any progress between the US and Iran toward an agreement to reopen the Strait of Hormuz, although some ships are still getting through by turning off their transponders and hoping for the best.
An Iranian military spokesperson said today that no ship can safely pass the Strait of Hormuz without Iran’s authorization and supervision and that President Trump’s claims of control over the Strait are “nothing more than lies.” The Iranian statement was in response to President Trump's comment late Tuesday that the US has “total control over the Hormuz Strait” and that “we own it.”
The outlook for strong Q2 earnings is a bullish factor for stocks. The S&P 500 is tracking for earnings growth of almost 32% in Q2, well above projections of +23%, and nearly four times the average earnings growth rate outside of the Covid period since Q4 of 2013, according to Bloomberg Intelligence. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2. So far, earnings results have been positive, with 85% of the 446 S&P 500 companies that have reported Q2 earnings beating estimates, according to Bloomberg data.
The markets are discounting a 35% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16, down from 40% on Wednesday and 51% on Tuesday.
Overseas stock markets are mixed. The Euro Stoxx 50 is up +0.23%. China's Shanghai Composite today closed down -0.50%. Japan's Nikkei-225 Stock Average closed up +1.16%.
Interest Rates
September 10-year T-notes (ZNU6) are up +13 ticks. The 10-year T-note yield is down -7.2 bp to 4.621%. T-note prices received a boost from today’s favorable PPI report. However, the 10-year breakeven inflation expectations rate is little changed at 2.267%.
T-note prices are facing supply overhang ahead of today’s sale of $35 billion of 30-year T-bonds. Wednesday’s sale of $42 billion of 10-year T-notes produced an auction yield that was the highest since the 2007 financial crisis. Investors have recently demanded higher Treasury yields, partially due to Fed Chair Warsh's reduced guidance and uncertainty about the Fed's inflation-fighting resolve.
European government bond yields are lower. The 10-year German bund yield is down -2.5 bp to 3.134%. The 10-year UK gilt yield is down -1.4 bp to 4.956%.
Markets are discounting a 90% chance of a +25 bp ECB rate hike at its next policy meeting on September 10.
US Stock Movers
The Magnificent Seven are trading mostly higher today, supporting the overall market. Meta (META) and Tesla (TSLA) are leaders, with gains of more than +1%. Amazon (AMZN) and Nvidia (NVDA) are trading slightly lower.
Chip stocks are trading mostly higher today, with the iShares Semiconductor ETF (SOXX) trading up +2.2%. Leaders include Micron Technology (MU), Intel (INTC), and Marvell Technology (MRVL), with gains of more than +4%.
Cisco Systems (CSCO) is down more than -8% after disappointing guidance related to AI-tied networking gear sales.
Cerebus Systems (CBRS) is down more than -13% after delivering disappointing guidance of $215 million in Q3. The sell-off came despite the report that revenue from its cloud division nearly quadrupled to $127.7 million, exceeding its hardware business. The company designs and sells chips and also offers cloud computing.
Salesforce (CRM) is down -0.6% even after JPMorgan rated the company overweight, saying that AI-Saas implications for the company are overblown.
StubHub (STUB) is down more than -14% after a disappointing earnings report.
JD.com’s US-listed ADR (JD) is down more than -7% after the Chinese online retailer reported a quarterly revenue decline, the first since it went public in 2014.
Vail Resorts (MTN) is down more than -1% after Goldman Sachs initiated coverage with a sell rating.
Earnings Reports (8/13/2026)
Birkenstock Holding Plc (BIRK), Figure Technology Solutions In (FIGR), YETI Holdings Inc (YETI), Applied Industrial Technologie (AIT), Tapestry Inc (TPR), Bullish (BLSH), Dillard's Inc (DDS), Forgent Power Solutions Inc (FPS), X-Energy Inc (XE), Solv Energy Inc (MWH), Fermi Inc (FRMI), Applied Materials Inc (AMAT), Ascendis Pharma A/S (ASND), Madison Square Garden Sports C (MSGS), Midera Food Processing Inc (MFP), QXO Inc (QXO), NU Holdings Ltd/Cayman Islands (NU).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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