US equities rebound as S&P 500 and Nasdaq recover from early losses despite July wholesale inflation rising 0.9%. Investors favor tech giants like Nvidia, Amazon, and Microsoft amid ongoing Fed rate cut speculation.

US Stocks Rebound After Early Losses Despite Higher-Than-Expected Wholesale Inflation

US equities recovered from early losses on Thursday as investors rotated back into big-tech names following a disappointing wholesale inflation report.

The S&P 500 hovered around flat, while the Nasdaq Composite gained 0.2%. The Dow Jones Industrial Average lost 71 points, or 0.2%, after falling over 200 points at one point earlier in the session. Both the S&P and Nasdaq were down roughly 0.4% at their intraday lows before bouncing back.

Tech Stocks Lead the Recovery

Investors turned to high-performing tech giants, helping major averages regain ground:

• Nvidia: Strong buying momentum pushed the stock higher after early losses.
• Amazon: Shares advanced as traders rotated back into e-commerce and cloud leaders.
• Microsoft: Benefited from renewed investor confidence in large-cap tech.

Impact of July Producer Price Index (PPI)

July’s PPI reading rose 0.9%, well above the expected 0.2% month-over-month increase. The report signals that inflation pressures may still persist, impacting Federal Reserve policy decisions.

However, market participants noted that the increase was primarily driven by portfolio management costs and airfare, meaning core wholesale inflation remains closer to expectations.

Despite the stronger number, fed funds futures still indicate roughly 93% odds of a September rate cut, though the chance of a half-point reduction was removed.

Market Sentiment and Technical Outlook

• S&P 500: Support at 4,700; Resistance at 4,750. Consolidation expected before potential breakout.
• Nasdaq Composite: Support at 15,350; Resistance at 15,500. Momentum indicators suggest tech-heavy indexes could continue to lead recovery.
• Dow Jones Industrial Average: Support at 36,500; Resistance at 36,850. Blue-chip rotation ongoing.

Investors continue to monitor Fed policy expectations, with big-tech rotation driving short-term market movements.

Historical Context: Market Behavior Around Inflation Reports

• Past high PPI reports have often led to intraday volatility but subsequent recoveries, especially in technology and large-cap stocks.
• The buy-the-dip strategy remains popular among institutional and retail traders, highlighting confidence in long-term growth sectors.

Thursday’s session highlights the resilience of US equities despite inflation surprises. While the PPI report suggests that the Fed’s September cut is not guaranteed, investors appear focused on quality tech names and remain confident in broader equity market strength.

The next key data points and Fed commentary will likely determine whether this recovery extends into next week or remains short-lived.