Second Market Test Ahead: PPI Data 14/08/2025

HOT stories for today

US market wrap:

• U.S. equities climbed on Wednesday, extending their recent upswing as expectations for reduced Federal Reserve interest rates continued to propel the major indexes to record levels. The Dow Jones Industrial Average advanced 1.04%, the S&P 500 rose 0.32%, and the Nasdaq Composite closed up 0.14%. These gains followed Tuesday’s record-breaking session, fueled by an inflation reading that came in milder than anticipated, boosting optimism for a Fed rate cut in September. According to CME’s FedWatch Tool, traders now see nearly a 100% probability of such a move.
• A strong second-quarter earnings season has also acted as a further catalyst for the market. Investors shifted out of the mega-cap “Magnificent Seven” tech names into smaller companies, sending the Russell 2000 up 2% on Wednesday. Small-cap shares often benefit from lower interest rates, as they reduce borrowing costs and can stimulate consumer spending. Looking ahead, Thursday’s Producer Price Index report on wholesale inflation will offer another key piece of the economic puzzle.

Tariffs threaten inflation’s cooldown

• Despite a cooler-than-expected CPI reading, many economists still anticipate higher prices ahead. On Tuesday, President Donald Trump criticized Goldman Sachs for predicting tariffs would fuel inflation, joking that CEO David Solomon should “get a new economist” or focus on his DJ career. Goldman defended its analysis, with economist David Mericle telling CNBC that if recent tariffs follow earlier patterns, consumers could bear about two-thirds of the cost by fall.
• UBS’s Brian Rose said tariffs have already disrupted the downward trend in core inflation, while JPMorgan’s Michael Feroli estimated they could add 1–1.5 percentage points, some of which is already visible. Several analysts warn that this could become a headwind for consumer spending later in the year. Economists’ consensus doesn’t ensure accuracy; recession forecasts for 2023 famously proved wrong. And if Trump ever did push Solomon out, “DJ D-Sol” could still spin records.

Stocks on the move:

• Cisco (CSCO): Shares of the networking giant slipped nearly 3% after its fiscal fourth-quarter results only narrowly topped forecasts. Cisco reported adjusted earnings of $0.99 per share on revenue of $14.67 billion, versus analyst expectations of $0.98 per share and $14.62 billion in revenue, per LSEG data. Its forward guidance also just slightly exceeded estimates. Cisco stock has gained nearly 19% so far this year.
• Coherent (COHR): The semiconductor maker’s shares tumbled over 16% despite beating consensus estimates. It posted earnings of $1.00 per share (excluding items) on revenue of $1.53 billion, topping projections of $0.91 per share and $1.51 billion in revenue, according to LSEG. The company also revealed plans to divest its aerospace and defense division to Advent for $400 million.
• Bullish (BULL): The cryptocurrency exchange’s stock climbed more than 3% in after-hours trading following its first day on the New York Stock Exchange. Shares opened at $90, a 143% premium to the $37 IPO price, before closing at $68, still marking an almost 84% gain from its debut price.
• Ibotta (IBTA): The digital promotions platform’s shares sank over 21% after the company’s second-quarter results came in below analyst expectations.

Watchlist: CSCO, COHR, BULL, AMAT, DE, NTES, JD, AMD, COIN

Today’s action

• Asia-Pacific markets were mixed on Thursday as traders positioned for a potential U.S. Federal Reserve rate cut next month. Hong Kong’s Hang Seng Index advanced 0.58%, while China’s CSI 300 finished little changed. Japan’s Nikkei 225 slipped 0.31%, pulling back from its record-high close in the prior session.
•  U.S. stock futures were steady on Wednesday evening after the S&P 500 and Nasdaq Composite notched fresh all-time highs, with investors awaiting more economic indicators to gauge the health of the economy. S&P 500 and Nasdaq 100 futures hovered near the flatline, while futures tied to the Dow Jones Industrial Average inched up 13 points, or 0.03%. Thursday’s economic calendar includes the July Producer Price Index and weekly jobless claims for the period ending Aug. 9, both due at 8:30 a.m. ET. Economists surveyed by Dow Jones expect wholesale prices to have risen 0.2% in July, after holding steady in June.

Bitcoin

• Cryptocurrencies Bitcoin (BTC) and Ether (ETH) extended their rally Wednesday night, buoyed by rising institutional participation and a friendlier regulatory backdrop. Bitcoin surged to a new record high of $123,693, according to Coin Metrics. Ether also advanced, moving closer to its 2021 peak, and was recently up 5.7% at $4,763.49.
• The growing embrace of digital assets was also evident in the strong debut of Bullish (BULL), which nearly doubled on its first day of trading. Shares opened at $90, a 143% premium to the $37 IPO price, before settling at $68, an 84% first-day gain. In Wednesday’s after-hours session, Bullish stock added another 12%.
  Watchlist: BTC: 99,000–124,800 | ETH: 4,000–4,800 | SOL: 200–220

Forex

• EUR/USD steadied near 1.1700 in early Thursday trade after two days of declines, with the U.S. dollar staging a mild technical recovery. Markets await Eurozone Q2 GDP data later in the day, followed by U.S. PPI and weekly jobless claims. CME’s FedWatch Tool shows a 94% probability of a 25-basis-point Fed cut in September, while U.S. Treasury Secretary Scott Bessent suggested a 50-basis-point move is possible.
• JPY/USD strengthened for a third straight session, hitting a three-week high as divergent BoJ-Fed policy expectations drew flows into the lower-yielding yen. The BoJ’s July inflation upgrade and openness to a rate hike by year-end contrast with growing bets on U.S. rate cuts, further pressuring the greenback despite a broader risk-on mood.
  Watchlist: EUR/USD: 1.1000–1.1700 | USD/JPY: 140–150

Basic Materials

• Gold (XAU/USD) pulled back from a three-day high near $3,375 as upbeat global risk sentiment dented safe-haven demand. Optimism over a potential U.S.-China trade truce extension and the upcoming U.S.-Russia summit weighed on prices, though Fed rate-cut bets kept the dollar subdued, offering some support. Traders await the U.S. Producer Price Index for fresh direction.
• West Texas Intermediate (WTI) crude (CL) fell to about $62.15, its lowest in nearly two months, after a bearish EIA inventory build and an IEA oil surplus forecast. Markets now look to Friday’s Trump-Putin meeting for possible geopolitical cues.
  Watchlist: Gold: 2,600–3,500 | US Oil: 55.60–75.80

Economic Calendar (EST):

08:30 am: USD Core PPI, PPI
08:30 am: USD Unemployment Claims
10:00 am: USD FOMC Member Musalem Speaks
01:00 pm: USD President Trump Speaks
02:00 pm: USD FOMC Member Barkin Speaks



Earnings:

DE                      Deere & Company
NTES                 NetEase Inc.
JD                      JD.com Inc.
TPR                   Tapestry Inc.

AMC (After Market Close): AMAT, NU

 

The TEFS Analyst team wishes you a successful day!