S&P 500, Dow, Nasdaq End Lower As Surging Oil Raises Odds For A September Rate Hike — ORCL, ADBE, M, NVDA, UBER In Focus

• The S&P 500 ended Thursday 0.6% lower, while the Nasdaq 100 fell 1.1% and the Dow Jones Industrial Average fell 0.6%.
• Odds of a rate hike in September crossed 70%, according to the CME FedWatch tool.  
• Oracle beat Q1 expectations on strong cloud revenue growth. 

U.S. stock indices fell on Thursday as escalating Middle East tensions pushed oil prices higher and producer prices came in hot, raising expectations for an interest rate hike this month.

The S&P 500 ended Thursday 0.6% lower, while the Nasdaq 100 fell 1.1% and the Dow Jones Industrial Average fell 0.6%. The Russell 2000, which tracks stocks with small market capitalizations, rose about 0.5%.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.4%, and Invesco QQQ Trust (QQQ) ended Thursday 0.3% lower, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) was down 1%.

Meanwhile, the VanEck Semiconductor ETF (SMH) fell 2.3%, while the iShares Semiconductor ETF (SOXX) dropped 2.7%, amid weakness in Micron Tech (MU), Advanced Micro Devices (AMD), Broadcom (AVGO) and Nvidia (NVDA). The broader Vanguard Information Technology ETF (VGT) ended 1% lower, tracking weakness in Meta (META) and Amazon (AMZN)

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘bearish,’ with ‘high’ message volumes. 

US Market Drivers

Traders are betting that a benchmark interest rate hike could be on the horizon as persistent inflation keeps pressure on the U.S. economy. 

Recent comments from central bank officials indicate that while a policy pause was previously anticipated, persistent price pressures across core sectors may compel policymakers to resume monetary tightening sooner than expected.

Fresh economic data from the U.S. Bureau of Labor Statistics added urgency to the debate. The August Producer Price Index (PPI) released on Thursday registered a monthly expansion of 0.4%, lifting headline producer inflation to an annual rate of 5.4%, higher than the 5.3% economists expected. 

“Inflation is still a problem,” Clark Bellin at Bellwether Wealth told Bloomberg in an interview. “While interest-rate movements can’t bring high oil prices down, the Fed’s job is to respond to inflationary pressures.” 

Higher crude prices added to the strain on equities, as West Texas Intermediate crude futures surpassed $100 a barrel. Boosted by the ongoing U.S.-Iran conflict now in its seventh month, both domestic crude and global benchmark Brent crude futures posted their highest finishes since May 19.

Investors would now keenly await consumer price inflation numbers due on Friday to judge the course of interest rates. 

Key Trending Stocks

Oracle Corp. (ORCL): The cloud services provider’s first-quarter results showed triple-digit growth in its cloud infrastructure business as the tech giant expands its footprint in artificial intelligence. 

Adobe (ADBE): The company’s softer Q4 revenue outlook overshadowed the strong quarterly numbers. 

Cybersecurity Stocks: Artificial intelligence compute demand continues to outpace supply, and cybersecurity is set to emerge as the technology's next significant growth vector, Nvidia Corp. Chief Executive Officer Jensen Huang said on Thursday. 

Uber (UBER): CEO Dara Khosrowshahi disclosed a roughly $10 million open-market purchase.

Macy’s Inc. (M): CEO Tony Spring reportedly said on Thursday that the department-store retailer plans to reinvest $96 million of its tariff refund into the business.

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