Risk sentiment soured on Thursday following hotter-than-expected producer inflation data, which dampened optimism for aggressive interest rate cuts in 2025. Adding to the uncertainty, an unexpected rise in jobless claims cast doubt on the resilience of the U.S. labor market.

Major U.S. stock indices were in the red during midday trading in New York. The Nasdaq 100 slipped 0.4%, retreating from its record highs reached in the previous session, while small caps underperformed as the iShares Russell 2000 ETF IWM dropped 1%.

The Producer Price Index surged to 3% year-over-year in November, its highest level since February 2023, outpacing both forecasts and the upwardly revised 2.6% from October. On the labor front, weekly jobless claims rose by 17,000 to 242,000, exceeding consensus estimates of 220,000.

Treasury yields ticked higher, with the 10-year benchmark yield climbing 4 basis points to 4.31%, as investors placed greater emphasis on the robust inflation reading. However, expectations for a 25-basis-point rate cut at the upcoming Federal Reserve meeting remained intact, with Fed futures pricing in a 98% probability.

In currency markets, the U.S. Dollar Index, as measured by the Invesco DB USD Index Bullish Fund ETF UUP, edged up 0.1%, while gold prices slid more than 1%.

Natural gas prices soared nearly 5%, reaching levels not seen since late October 2023, after a steep storage draw fueled buying momentum.

In cryptocurrencies, Bitcoin BTC/USD traded modestly higher, up 0.3% to $101,500, while Ethereum ETH/USD gained 3.1%.

Thursday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY eased 0.1% to $606.65.
• The SPDR Dow Jones Industrial Average DIA fell 0.2% to $441.69.
• The tech-heavy Invesco QQQ Trust Series QQQ edged 0.2% down to $528.71.
• The iShares Russell 2000 ETF IWM fell 0.9% to $235.90.
• The Consumer Staples Select Sector SPDR Fund XLP outperformed, up by 0.5%; the Health Care Select Sector SPDR Fund XLV lagged, down 0.5%.

Thursday’s Stock Movers

• Adobe Inc. ADBE tumbled by over 12%, despite beating Street’s profit and revenue estimates last quarter, as the company lowered guidance for the first quarter of 2025.
• Nordson Corp. NDSN tumbled 9%, while Ciena Corp. CIEN rose 16% in reaction to earnings.
• Major companies slated to report earnings after the close include Broadcom Inc. AVGO and Costco Wholesale Corp. COST.

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