Stocks Steady Amid Cooling Inflation and Rising Jobless Claims

U.S. stocks remained relatively unchanged on Thursday as investors analyzed the latest inflation and labor market data, which could provide insights into the Federal Reserve's upcoming interest rate decision.

Navigating the Shifting Economic Landscape

Inflation Pressures Ease, but Jobless Claims Climb

The August Producer Price Index (PPI) showed that wholesale prices rose 0.2% month-over-month, slightly above economists' expectations. However, the annualized increase of 1.7% was in line with forecasts, and July's reading was revised downward, indicating that inflationary pressures may be cooling. Meanwhile, initial jobless claims climbed more than expected to 230,000 last week, an increase of 2,000 from the prior period.These data points are closely watched by investors as they assess the Federal Reserve's next move. The market's odds of a 25-basis-point rate cut have now edged up to 87%, compared to just 50% a few days ago. Traders are eager to see how the central bank will balance the need to tame inflation with the potential risks of a slowing economy.

Stocks Tread Carefully Amid Shifting Expectations

The S&P 500 and Nasdaq Composite indexes were little changed on Thursday, taking a breather after the previous session's sharp gains fueled by a tech rally. The Dow Jones Industrial Average also dipped slightly as investors digested the latest economic data.The market has been on a seesaw in recent days, with revived enthusiasm for tech stocks pulling the broader market out of a slide. However, the latest consumer inflation reading had dampened hopes for a more aggressive 0.5% rate cut by the Federal Reserve.

Moderna Shares Plummet on Revised Outlook

In corporate news, Moderna (MRNA) shares plunged 17% after the biotech giant lowered its annual revenue outlook for 2025. The company also announced plans to slash its annual R&D budget by roughly $1.1 billion by 2027, a move that raised concerns among investors about the company's long-term growth prospects.The Moderna news underscores the broader uncertainty facing the market as investors navigate the shifting economic landscape. With the Federal Reserve's policy decision looming, market participants will be closely watching for any signals that could provide clarity on the path forward.

Delta Navigates Summer Turbulence, Maintains Positive Outlook

In a separate development, Delta Air Lines (DAL) stock jumped before dipping into negative territory on Thursday. The airline said its full-year profit will come at the mid-point of its previously anticipated range, despite a computer glitch earlier this summer that caused disruptions.Delta's ability to maintain a strong outlook despite the tech-related challenges highlights the resilience of some companies in the face of unexpected obstacles. Investors will be closely monitoring how other industries and sectors navigate similar hurdles in the coming months.As the market continues to grapple with the implications of the latest economic data, the focus remains on the Federal Reserve's upcoming policy decision and its potential impact on the broader investment landscape. Investors will be closely watching for any signals that could provide clarity on the path forward.