Wall St edges higher with earnings in focus; chip stocks retreat
SPY•Producer prices ease as rate expectations stay muted
Data on Wednesday showed the Producer Price Index for final demand declined 0.3% in June, against forecasts for a flat reading, adding to signs that inflation was easing before the ongoing escalation in the Middle East conflict.
"It's hard to feel too excited about last month's drop in producer prices, which largely reflected lower energy prices —prices which rebounded in the first half of July as energy traffic through the Strait of Hormuz slowed," said Charlie Ripley, portfolio manager at Allianz Investment Management.
The report followed Tuesday's softer-than-expected consumer inflation data, which tempered expectations for an imminent Federal Reserve rate hike.
Traders now see about a 12% chance of a quarter-point rate increase at the Fed's next meeting later this month.
Wednesday also marked the second day of Fed Chair Kevin Warsh's testimony before Congress. Warsh told lawmakers the Fed was not meeting its price stability mandate, but offered little guidance on the policy path ahead, saying options included a rate hike, a hold or a cut.
