U.S. Stocks Hold Steady as Investors Await Inflation Reports

U.S. stocks traded sideways on Tuesday, with major indexes showing little direction. Investors remain cautious ahead of key inflation data due this week.

The Dow Jones Industrial Average gained 37.62 points, or 0.1%, to 45,552.57. The Nasdaq Composite fell 33.42 points, or 0.2%, to 21,765.28. The S&P 500 slipped 5.55 points, or 0.1%, to 6,489.60.

Investors Pause Ahead of Inflation Data

Traders are waiting for the Producer Price Index (PPI) on Wednesday and the Consumer Price Index (CPI) on Thursday. These reports could guide the Federal Reserve’s next interest rate decision.

Last week’s weaker jobs report raised hopes for a rate cut. Economists expect PPI growth to remain at 3.3% in August. CPI is projected to rise to 2.9% from 2.7% in July. Core CPI, which excludes food and energy, is likely to stay at 3.1%.

According to the CME FedWatch Tool, markets see a 92% chance of a 25-basis-point cut. Only 8% expect a half-point move.

U.S. stocks inch higher as markets wait for inflation reports

Job Revisions Pressure the Market

The Labor Department revised non-farm payrolls lower by 911,000 for the 12 months ending March 2025. This raised concerns about slowing economic growth.

Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, warned:

“The labor market keeps weakening. That makes it easier for the Fed to cut rates. But if CPI comes in hotter, markets may fear stagflation. The bull market has held strong this year, but risks are building.”

Sector Performance

• Housing stocks dropped, pulling the Philadelphia Housing Sector Index down 3.0%. This decline came after a nine-month high on Monday.
• Energy stocks rose as oil prices spiked. The NYSE Arca Oil Index climbed 1.9%, and the Philadelphia Oil Service Index gained 1.2%.
• Bank stocks also advanced, with the KBW Bank Index up 1.2%.

Global Market Snapshot

Overseas trading was mixed. Japan’s Nikkei 225 fell 0.4%, while Hong Kong’s Hang Seng Index gained 1.2%. In Europe, Germany’s DAX dropped 0.4%. The FTSE 100 and CAC 40 both rose 0.2%.

Treasury Yields Edge Higher

U.S. Treasury prices fell after several sessions of gains. The benchmark 10-year yield rose 4.2 basis points to 4.088%.

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