Hot PPI Data Cools Fed Cut Hopes as Markets Stay Mixed and Crypto Swings

Market Highlights

U.S. Producer Price Index (PPI) rose sharply in July, up 0.9% month‑on‑month—far exceeding the 0.2% forecast—and marking the largest monthly jump since mid‑2022. Core PPI climbed to 3.7% annually, the highest in three years.
Markets reduced expectations for a sizable Fed rate cut in September. The probability of a 50-basis-point cut is effectively off the table, with the likelihood of a 25-basis-point cut now around 92%, down from nearly 100% earlier.

U.S. indexes ended mixed on Thursday following the inflation data: the Nasdaq dipped slightly while the S&P 500 closed modestly higher.
Major tech names helped stabilize the markets, though smaller-cap stocks, including equal-weight indices and the Russell 2000, underperformed.

Asia-Pacific markets reacted variably to U.S. inflation news. The MSCI Asia-Pacific index declined modestly (~0.2–0.3%), though Japan's Nikkei 225 rebounded (+0.4% to +1.6%) thanks to stronger-than-expected Q2 GDP growth of 1% .
European futures edged higher, while commodity markets saw stability: Brent crude held steady, and gold traded modestly higher at around $3,343–$3,344/oz.

U.S. Treasury yields rose slightly, with the 10-year yield at approximately 4.28–4.29% and the 2-year yield near 3.73%.
The U.S. Dollar strengthened somewhat, gaining against major currencies like the Euro and Yen.

Earnings season remains broadly positive. Companies like Foxconn (driven by AI demand) and Birkenstock reported strong results, while Deere underwhelmed.
Intel shares jumped 4–4.5% in after-hours trading, spurred by reports that the Trump administration may take a stake in the company to support a chip factory in Ohio.

XRP fell about 7%, triggered by a sudden $437 million sell‑off and broader market liquidations totaling around $1 billion .
Bitcoin slid roughly 3–3.6%, dropping below the $117,000 support level amid elevated liquidations.
Ethereum, however, gained 1.7%–4.1%, depending on the source—reflecting speculative rotation among crypto investors .

Inflation pressures remain elevated. The surprise jump in PPI has shifted sentiment away from aggressive rate cuts this fall.
Equity markets show resilience. Mega-cap techs continue to support overall indices, even as broader markets react to macro headwinds.
Global markets are mixed. Asia and Europe show cautious optimism amid uncertain Fed policy and geopolitics.
Bond yields inch upward and the dollar strengthens, signaling reduced dovish expectations.
Crypto markets remain turbulent, with speculative flows causing divergence between leaders like Bitcoin/XRP and Ethereum.
Corporate earnings continue to matter. Intel's post-market surge highlights how company-specific news can move markets, especially in tech.