The Latest Inflation Data Showed More Encouraging Signs. Stocks Climb To Fresh Records.

Stocks hit a new record on Thursday after the latest wholesale inflation report was more positive than expected.

The S&P 500 topped 7,800 for the first time ever before pairing some gains during the sessions. The tech-heavy Nasdaq Composite overperformed, climbing 0.80% at 2:33 p.m. ET. Tech stocks like SanDisk, Micron and Netflix were among those leading gains in the session. The Dow Jones Industrial Average was mostly flat at the same time.

Expectations for an interest rate hike from the Federal Reserve decreased even further after wholesale inflation remained flat in July.

Figures from the CME Group’s Fed Watch tool stood at 67.9%, compared to 59.4% on Wednesday. Expectations for an increase to the 3.75%-4% benchmark declined to 32.1%, compared to 40.6% the day prior.

The Producer Price Index stood below expectations from the Dow Jones consensus estimate, which expected a 0.2% increase.

The Bureau of Labor Statistics noted that, excluding more volatile items like food and energy, the core producer price index rose 0.2%. The figure was also below expectations, which stood at 0.3%.

The inter-annual headline PPI increased 4.7% for the all-items index, while the core figure was 4.2%.

Headline and core inflation also provided an encouraging sign, rising in line with expectations in July, according to data released by the Bureau of Labor Statistics on Wednesday.

The former rose 0.1%, while the latter, which excludes more volatile components like food and energy, did so 0.2%. Annual figures stood at 3.4% and 2.5% respectively.

The figures leave inflation above the Federal Reserve’s 2% target. But a second consecutive month of relatively mild price increases could strengthen the case for keeping interest rates unchanged while policymakers wait for a clearer picture of the economy.

Elsewhere, oil prices are declining even though the stalemate over the Strait of Hormuz continues. A senior Iranian official told Reuters that there have been no breakthroughs in the conflict.

“One of the issues that is being discussed ⁠via mediators is the U.S. returning to the interim agreement and defining a timeframe for implementing its ​commitments. There has been absolutely no progress on this issue,” the official told the outlet.

“The United States violated the interim agreement 48 hours after it was reached ​and withdrew from it a few days later,” the official added.